[Federal Register Volume 59, Number 77 (Thursday, April 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9606]


[[Page Unknown]]

[Federal Register: April 21, 1994]


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Part VI





Department of Housing and Urban Development





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24 CFR Parts 50, 55, 58, and 200




HUD Procedure for the Implementation of Executive Order 11988; Revision 
of HUD Minimum Property Standards for One- and Two-Family Dwellings; 
Final Rule
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

Office of the Secretary

24 CFR Parts 50, 55, 58, and 200

[Docket No. R-94-1436; FR-865-F-05]
RIN 2501-AA23

 
HUD Procedure for the Implementation of Executive Order 11988; 
Revision of HUD Minimum Property Standards for One- and Two-Family 
Dwellings

AGENCY: Office of the Secretary, HUD.

ACTION: Final rule.

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SUMMARY: HUD is adopting procedures to implement Executive Order 11988 
on floodplain management. The purpose of these procedures is to provide 
direction for compliance with the executive order for all HUD programs 
(except those explicitly excluded) both by HUD and by certain state and 
local grant recipients, before their respective decisions to approve a 
proposed action that involves HUD financial assistance; and would 
affect a floodplain. The rule is designed as a balanced rule that 
implements the executive order while cutting costs and review time for 
HUD-related housing and other actions by reducing or eliminating 
processing steps where appropriate. In addition to the implementation 
procedures, HUD is revising the Department's Minimum Property Standards 
for One- and Two-Family Dwellings to accord with the executive order on 
floodplain management, and with WRC Guidelines, FEMA regulations, and 
current HUD mortgage underwriting practices. HUD environmental review 
regulations also are being revised in this rule, to cross-reference to 
the decision making process under this rule.

EFFECTIVE DATE: May 23, 1994.

FOR FURTHER INFORMATION CONTACT: Concerning 24 CFR parts 50, 55, and 
58: Richard H. Broun, Director, Office of Environment and Energy, room 
7240, Department of Housing and Urban Development, 451 Seventh Street, 
SW., Washington, DC 20410. For telephone communications, contact Truman 
Goins, Water Resources Coordinator, Office of Environment and Energy, 
at (202) 708-2894, TDD (202) 708-2565. With respect to 24 CFR part 200, 
contact John E. Bonkoski, Office of Housing, at (202) 708-1740, TDD 
(202) 708-2566. (These are not toll-free numbers.)

SUPPLEMENTARY INFORMATION: The information collection requirements 
contained in this rule's amendments to 24 CFR part 55 have been 
submitted to the Office of Management and Budget (OMB) for review under 
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501-3520). The 
paperwork approval number(s), when assigned, will be published in a 
separate Federal Register document.
    The public reporting burden for each of these collections of 
information is estimated to include the time for reviewing the 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. Information on the estimated public 
reporting burden is provided under the preamble heading, Other Matters. 
Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden, to the Department of Housing and Urban Development, Rules 
Docket Clerk, 451 Seventh Street, SW., room 10276, Washington, DC 
20410; and to the Office of Information and Regulatory Affairs, Office 
of Management and Budget, Attention Desk Officer for HUD, Washington, 
DC 20503.

I. Background

    On January 4, 1990, HUD published in the Federal Register (55 FR 
396) a Notice of Proposed Rulemaking to add 24 CFR part 55 and to amend 
24 CFR parts 50, 58 and 200 to implement Executive Order 11988, 
Floodplain Management, and Executive Order 11990, Protection of 
Wetlands (42 FR 26951, 26961, May 25, 1977). A correction to the Table 
in proposed Sec. 55.11(c) was published on January 25, 1990 (55 FR 
2533). The executive orders establish Federal policy to assure that 
Federal programs avoid adverse impact on wetlands and floodplains; 
minimize destruction, loss or degradation of wetlands; preserve and 
enhance the natural and beneficial values of wetlands; reduce risk of 
flood loss; minimize the impact of floods on human safety, health, and 
welfare; and to the extent possible, restore the natural and beneficial 
values served by floodplains.
    This final rule implements Executive Order 11988 only and has been 
revised to eliminate references in the proposed rule to coverage of 
wetlands. The Department is not proceeding with a final rule that would 
apply to wetlands under Executive Order 11990 because the 
Administration is currently revising Federal policy concerning 
wetlands. HUD personnel will continue to follow outstanding 
instructions in implementing Executive Order 11990.
    The final rule fulfills the requirement of the Floodplain 
Management executive order to issue implementing procedures and 
provides essential, overdue guidance to program participants and HUD 
staff that is tailored to HUD programs. The rule reduces the impact of 
the order's decision making procedures on housing and other program 
costs by: (1) Excluding from review types of actions that have no real 
floodplain impact; and (2) simplifying decision making procedures, 
e.g., contemplating the use of existing data sources and meshing 
necessary reviews under the order with other required environmental 
processing. The final rule does not contain significant changes from 
the proposed rule, other than the deletion of wetlands coverage. 
Specific comments received on the proposed rule, HUD responses, and 
changes from the proposed rule are discussed below in part II of this 
preamble.
    Under Executive Order 11988, Federal agencies should avoid directly 
or indirectly supporting floodplain development or otherwise adversely 
affecting floodplain areas unless there are no practicable alternatives 
to such actions. Federal agencies are required to implement Executive 
Order 11988 with respect to acquiring, managing and disposing of 
Federal property; providing Federally undertaken, financed, or assisted 
construction and improvements; and conducting Federal activities and 
programs affecting land use. The executive order also provides certain 
requirements for the proposed disposition of properties owned by 
Federal agencies and the creation of leases, easements, and rights-of-
way on Federally owned properties.
    The proposed rule set out procedures by which HUD (and state and 
local grantees that assume environmental responsibilities under 24 CFR 
part 58) would implement both executive orders. Principally, it set out 
the eight-step decision making procedure described in the U.S. Water 
Resource Council's Floodplain Management Guidelines for Implementing 
Executive Order 11988 (43 FR 6030, February 10, 1978), set out the 
applicability of that procedure to HUD actions by type of action 
(critical or non-critical) and location, proposed the inapplicability 
of the procedure and other requirements of the executive orders to 
certain types of proposed actions, and linked the procedure to the 
Department's environmental review procedures under 24 CFR parts 50 and 
58. The proposed rule also proposed the revision of the HUD Minimum 
Property Standards (MPS) regulations for new construction of one- and 
two-family dwellings to conform to the 100-year base flood standard for 
new construction and substantial improvement of residential structures 
with basements under regulations of the National Flood Insurance 
Program (NFIP); comparable standards were proposed for residential 
structures that are without basements, are located in coastal high 
hazard areas, or contain critical actions.
    In the preamble to the proposed rule, the Department also 
specifically requested comment on an alternative standard, not set out 
in the proposed rule, that would amend the MPS to require that (1) the 
elevation of the lowest floor in one- and two-family residential 
structures without basements in special flood hazard areas be at or 
above one foot above the FEMA established 100-year base flood (one-foot 
free board); and (2) that the underside of the lowest floor of one- and 
two-family structures in coastal high hazard areas and their horizontal 
supports be at least one foot above the base flood level where FEMA has 
determined that level without establishing stillwater elevation.

II. Comments and Responses

    This proposed rule was published in the Federal Register for public 
comment within 60 days. The Department received six responses within 
this comment period and two after the March 5, 1990 comment period 
deadline. These late comments generally repeated or supplemented 
comments previously received. Public comments were received from eight 
sources: Four U.S. governmental agencies, one professional individual, 
one national trade association and two national professional 
associations. The Department is responding to all comments and 
suggestions that concern those portions of the proposed rule that 
implement Executive Order 11988. Because of the decision not to proceed 
at this time with those provisions of the rule that would implement 
Executive Order 11990, the following discussion does not address 
comments relating to protection of wetlands.
    In reference to the proposed prohibition on HUD financial 
assistance in floodways except for functionally dependent uses 
(Sec. 55.1(c)(1)), a commenter suggested that HUD include the 
definitions and procedural requirements of 44 CFR 60.3(d)(3) of the 
National Flood Insurance Program (NFIP) regulations regarding 
prohibitions of encroachments that would increase flood levels.
    The rule prohibits support for project development in a floodway 
unless it meets the criteria of a functionally dependent use 
(Sec. 55.2(b)(5)) and also generally requires a determination of no 
practicable alternative to location in the floodplain. Notwithstanding 
this review, all projects, before HUD action, are subject to local 
review and approval for compliance with the NFIP regulations in 
accordance with the locality's contract with FEMA. HUD, therefore, does 
not believe it is necessary to repeat the NFIP requirements in its 
regulations, and has not adopted this suggestion.
    A commenter suggested that the Areawide compliance procedures 
(Sec. 55.25) be revised to require HUD to undertake a periodic review 
to assure that initial conclusions remain valid and that floodplain 
management criteria of the NFIP regulations are being applied. The 
commenter raised a concern that individual structures might be built at 
less than the 100-year flood elevation (base flood) if a periodic 
review is not undertaken.
    HUD will only enter into an Areawide process where communities are 
agreed participants in the procedure and its floodplain management 
goals and objectives. Further, HUD will only execute this process with 
communities that are participating members in good standing with NFIP. 
The objective of the Areawide process is to eliminate delays, 
duplication, costly publications, etc. from project-by-project reviews, 
where it is agreed, demonstrated and documented that all actions to be 
undertaken in a specific area of a floodplain are and will be in 
compliance with the locality's floodplain management plan and the full 
extent of the NFIP regulations. For HUD programs and projects, all 
appropriate design drawings, plot plans, etc. would need to demonstrate 
compliance with local requirements and acceptance under the NFIP. The 
Department notes that under the rule, individual actions that fit 
within the types of proposed HUD actions specifically addressed under 
the areawide compliance require a determination by HUD (or a grant 
recipient under 24 CFR part 58) as to whether the action accords with 
areawide strategy; where the individual action does not accord with the 
areawide strategy, specific development and mitigation measures will be 
a condition of HUD's approval of the action. (See Sec. 55.25(c).) 
Periodic spot checking of individual structures would also come under 
the regulatory code enforcement procedures of the local government 
authority. Beyond these enforcement mechanisms, questions concerning a 
community's fulfillment of its legal and contractual obligations to 
FEMA and the NFIP are the responsibility of FEMA to pursue. HUD will 
respond appropriately to any notices issued by FEMA concerning 
participating communities. The final rule will remain unchanged, except 
for the deletion of references to wetlands and wetland protection.
    A commenter suggested that in the definition of ``substantial 
improvement'' (Sec. 55.2(b)(9)), the ``50 percent of market value 
test'' contained in paragraph (A) should be applied also to projects 
that meet the criteria of increased unit density or increased project 
use in paragraph (B).
    The language of paragraph (B) stands by itself. It is consistent 
with criteria relating to rehabilitation projects in HUD environmental 
regulations at 24 CFR 50.20(c)(1) and 58.35(a)(4)(i)(A) and (ii)(B)(1). 
HUD does not believe it is necessary or desirable to apply the 
increase-in-value test of paragraph (A) to actions that will increase 
unit density or project use to the extent set out in paragraph (B).
    Two commenters discussed HUD procedures for disposing of foreclosed 
properties. One commented that under Sec. 55.22 (conveyance 
restrictions), HUD should list the third alternative of withholding 
properties from conveyance. Two other comments expressed concern that 
these properties may be subject to repeated flooding or pose safety 
hazards, or the properties may, after purchase, be converted to less 
compatible uses. One suggested that, as a minimum, one- to four-family 
properties, which the proposed rule excluded from the eight-step 
decision making process, should be subject to the five steps applicable 
to multifamily and bulk sales dispositions; the other recommended that 
disposition of HUD properties be subject to the public notification 
requirements (i.e., Steps 2 and 7) and that criteria for evaluating 
potential impacts of the disposition be developed.
    As explained in the preamble to the proposed rule, HUD is obligated 
to dispose of properties in its inventory and return the proceeds to 
the insurance fund as quickly as possible so as to retain the integrity 
and security of the fund. Therefore, withholding properties from 
conveyance is not an available option. HUD does not believe going 
through the entire eight-step process for the disposition of foreclosed 
properties located in a floodplain would further floodplain management 
objectives. In these cases, there is no locational alternative to the 
action and in any event the prospective purchaser of the property is 
notified of its floodplain location. Moreover, in the vast majority of 
cases, these properties have never been flood damaged. If previously 
damaged properties pose a potential for repeated damage or a safety 
hazard, community enforcement of the NFIP requirements and public 
health and safety laws, and FEMA assistance (purchasing properties 
deemed to create a permanent hazard or liability), are the appropriate 
means of addressing this issue. This is also the case regarding 
possible future ``conversion'' to less compatible uses. The local 
community regulates land use controls and in its NFIP contract with 
FEMA, a floodplain management plan/program identifies permitted and 
compatible uses. Therefore, HUD does not feel the need to change its 
proposed provisions regarding the disposition of foreclosed property 
(except to delete the reference to wetlands).
    Section 55.12(c)(6) of the proposed rule would exclude HUD approval 
of a project site from the eight-step decision making process where an 
``incidental'' portion of the site is in an adjacent floodplain or 
wetland, if the proposed construction and landscaping activities 
(except for certain minor activities) do not occupy or modify the 
floodplain or wetland; appropriate provision is made for site drainage; 
and a restriction is placed on the use of the property to preserve the 
floodplain or wetland. A commenter recommended defining or clarifying 
the terms ``incidental'' and ``appropriate'' and expressed concern that 
the regulation allowed drainage of wetlands. The commenter also 
suggested that sites that are described in Sec. 55.12(c)(6) should be 
subject to an analysis of cumulative and indirect impacts and should 
not be excluded from the eight-step decision making process. Another 
commenter also noted the lack of definitions for ``appropriate'' and 
``minor'' and suggested that all or part of the decision making process 
should be applied in order to allow only unavoidable impacts.
    As expressed in the preamble and text of the proposed rule, 
Sec. 55.12(c)(6) would only have been applicable to projects that ``do 
not occupy or modify the wetland [or] * * * floodplain''. This final 
rule does not apply to wetlands as such. In any event, HUD does not 
believe any stronger explanation is necessary as to the intent or 
objective not to affect or harm a wetland or floodplain through 
construction or development activity. Therefore, no further benefit 
will be gained by completing a procedural eight-step process. 
Cumulative and indirect impacts may be addressed under applicable NEPA 
assessment requirements. The term ``incidental'' refers to an area that 
is incidental in direct proportion to the overall size of a site under 
HUD review. The term ``minor'' is self-explanatory in the context in 
which it is used. Further, due to HUD's specifically imposed constraint 
that activities may ``not occupy or modify the * * * floodplain'', the 
floodplain cannot, except as passive open or green space, be utilized 
in the development or support of any project activity. HUD also notes 
that the requirement for ``appropriate provision * * * for site 
drainage'' in Sec. 55.12(c)(6)(ii) cannot be read to conflict with the 
prohibition in Sec. 55.12(c)(6)(i) against modifying the floodplain.
    Section 55.12(c)(9) of the proposed rule states that part 55 would 
not apply to ``HUD's acceptance of a housing subdivision approval 
action by the Department of Veterans Affairs or Farmers Home 
Administration in accordance with section 535 of the Housing Act of 
1949 (42 U.S.C. 1490o)''. The Department of Veterans Affairs expressed 
concern that this provision implies that the VA approves subdivisions.
    Section 55.12(c)(9) merely acknowledges HUD's obligation under 
section 535 to accept any VA subdivision approvals without performing 
further reviews. HUD acknowledges that shortly after section 535 was 
enacted, the VA unilaterally determined to discontinue processing and 
approving subdivisions. Whether or not VA approves subdivisions, 
however, this section will have no effect on VA's loan guarantee 
program. HUD believes it must reference the statute. It is also 
possible that sometime in the future, the VA could resume processing 
subdivisions.
    One commenter suggested that HUD consider expanding the definition 
of critical actions in Sec. 55.2(b)(2) to include housing for 
independent living for the elderly in an initial evaluation, and that 
the 100-year floodplain protection should only be permitted when all 
residents are relatively mobile and there is sufficient warning time 
for evacuation. The commenter also suggested that housing in flash 
flood areas should be considered a critical action.
    HUD believes that the condition of relative mobility is more than 
met under the basic requirements of the elderly program. That is, all 
residents must be self sufficient and capable of independent living 
without support assistance. The commenter failed to understand the 
intent of HUD's proposed rule on program implementation. HUD will not 
blindly support development in a special flood hazard area if it has 
been identified on a FEMA flood hazard area map. As with all HUD 
actions that are subject to the decision making process of the rule, if 
a project or site in a flood hazard area is not rejected outright, the 
decision making process of this rule will be followed before any 
decision to proceed. HUD also sees no basis to single out housing in 
flash flood areas as a critical action. This suggestion is impractical 
since FEMA does not identify flash flood areas on its maps or define 
what constitutes a flash flood area. Moreover, any HUD approved 
activity will provide protection and security not only for the 
improvements but also for the potential residents, within the 
parameters of the locality's floodplain management agreements with FEMA 
and the NFIP.
    This commenter also raised the issue of housing for the hearing and 
sight impaired, developmentally disabled and chronically mentally ill 
as types of housing that should be considered a critical action. The 
commenter also expressed concern that projects for handicapped persons 
under the Supportive Housing Demonstration Program were not treated as 
critical actions under the final rule for that program (see 54 FR 
47023-47054, November 8, 1989), as originally proposed.
    The preamble to that final rule provided a discussion of HUD's 
original intent to include all generically designated handicapped 
housing as a critical action and the explanation of why it was being 
deleted in the final rule. Since then, no additional information or 
data on the subject has been presented to the Department. Therefore, 
HUD declines to adopt this suggestion.
    A commenter suggested that presentation of the decision making 
process set forth in Sec. 55.20 be expanded to include some of the 
discussion contained in the Water Resources Council (WRC) Floodplain 
Management Guidelines for each of the eight steps.
    HUD considered this issue when preparing the Proposed Rule and 
determined not to include any narrative discussion from the WRC 
Guidelines in its regulations. It is HUD's intent to issue a 
Departmental Handbook on procedures for implementing the eight step 
process. The Handbook would include specific and detailed procedures 
and examples, sample notices, distribution systems, review methods, 
project and source documentation, etc., oriented to the type of 
projects eligible for HUD program assistance. Accordingly, HUD has not 
adopted this comment.
    The National Association of Home Builders (NAHB) objected to the 
application of the decision making process under this rule to HUD's 
approval of new subdivisions for purposes of issuing home mortgage 
insurance under the National Housing Act, and to the issuance of HUD 
commitments to insure more than four home mortgages in a new 
subdivision. The NAHB contended that these actions are not, or at least 
need not be considered, major Federal actions that significantly affect 
the quality of the human environment as this term is used in the 
National Environmental Policy Act of 1969 (NEPA), because HUD 
commitments to insure mortgages are not essential to the development of 
the subdivision. Accordingly, the NAHB asserted that HUD subdivision 
approval procedures should be listed in Sec. 55.12 as categorically 
excluded from the decision making process.
    HUD does not agree with these comments. The Department has 
consistently considered HUD ``subdivision approval'' as being a Federal 
action that is subject to NEPA environmental review under HUD 
regulations at 24 CFR part 50. This view is in accord with the CEQ 
regulatory definition of major Federal action, which includes ``actions 
with effects that may be major and which are potentially subject to 
Federal control and responsibility.'' 40 CFR 1508.18. HUD also notes 
that, contrary to this comment's assumption, there is nothing in the 
executive orders that requires actions covered thereunder to be 
delineated in the same manner as those covered under NEPA. In fact, the 
Floodplain Management Guidelines define ``action'' in terms of the 
Federal activities listed in section 1 of Executive Order 11988, 
including ``conducting Federal activities and programs affecting land 
use.'' Moreover, section 4 of Executive Order 11988 and section 2(b) of 
Executive Order 11988 and section 2(b) of Executive Order 11990 
specifically require procedures for early public review of Federal 
actions whose impact is not significant enough to require the 
preparation of an environmental impact statement under NEPA. 
Accordingly, HUD is not making any change in the rule in response to 
this comment. In any event, on August 3, 1993, HUD issued a final rule 
(58 FR 41328) that discontinued HUD's subdivision processing and 
approval requirements, effective September 2, 1993. Thus, the concerns 
raised by the commenter (NAHB) have become moot.
    One commenter wanted further clarification of the term 
``comparative risk'' as used in the preamble to the proposed rule in 
connection with modifying requirements of the executive orders. The 
reference was to the ``comparative risks arising from various Federal 
programs and projects'' as a criterion for initiatives approved by 
Federal authorities for modifying requirements in the executive orders, 
i.e., to an expectation that agencies would implement the executive 
orders while giving necessary consideration to their mission for 
administering various programs and projects. HUD believes the narrative 
in the preamble to the proposed rule directly following the words 
``comparative risk'' adequately indicates the Department's intent in 
using the term. Also, in table I, Sec. 55.11(c), the commenter 
suggested that the types of ``non-critical actions'' category allowable 
in coastal high hazard areas be changed. The suggestion was to require 
actions to be both designed for the hazardous area and a ``functionally 
dependent use'' instead of either/or as proposed. Further, the 
commenter wanted HUD to limit all actions in a 100-year floodplain or 
wetland outside a high hazard area to those which are functionally 
dependent uses.
    HUD has not accepted either of these comments. HUD believes that in 
coastal high hazard areas, the ``either/or'' criterion in conjunction 
with the decision making process is appropriate for assuring 
responsible Federal actions. In non-high hazard areas, to accept a 
restriction to only ``functionally dependent uses'' as a basis for 
limiting proposed actions in a 100-year floodplain would exceed the 
mandate of the executive order and the Water Resources Council's 
Floodplain Management Guidelines. Such an approach, which would allow 
only water-dependent uses such as marinas and waterfront parks, would 
effectively red-line housing assistance to entire communities that have 
been established in 100-year floodplains.
    A commenter recommended that three items under the eight step 
process in Sec. 55.20 be changed. First, the commenter recommended that 
the time period for comment under the first public notice under 
Sec. 55.20(b)(2) be increased from 15 days to 30 days. HUD believes 
that 15 days is sufficient time for a reviewer to determine if it has 
an interest in a proposed action and to submit comments. It is 
important to note that the decision making process for activity 
affecting the floodplain and the specific project does not end at 15 
days. It does establish a point after which the remaining procedural 
elements can be pursued and technical work may proceed. Second, in 
Sec. 55.20(c)(1)(ii) the commenter recommended changing ``identical 
objective'' to ``overall project purpose''. HUD does not see any need 
to change the rule as proposed. Finally, in Sec. 55.20 (d) and (f), the 
commenter recommended adding requirements for identification and 
evaluation of cumulative impacts. HUD believes the procedures as 
written comply with the Floodplain Management Guidelines. If any 
further elaboration is necessary, it will be included in a Handbook on 
working procedures, definitions, documentation, etc. HUD does not 
believe any change is required and these sections will remain as 
written in the proposed rule (except for the deletion of references to 
wetlands).
    A commenter suggested that HUD review other agencies' compliance 
with the executive orders when HUD accepts VA or FmHA subdivision 
approvals under Sec. 55.12(c)(9) or adopts Executive Order reviews by 
other agencies under Sec. 55.26.
    HUD believes the rule as proposed properly addresses a statutory 
requirement, in the first instance, and provides adequate procedural 
safeguards to protect HUD's interest, in the second. The exclusion of 
VA and FmHA subdivision approval actions from HUD re-review is required 
by section 535 of the Housing Act of 1949, which states in part that 
each of the three agencies ``shall each accept an administrative 
approval of any housing subdivision made by any of the others.'' With 
regard to adoption of another agency's review under Sec. 55.26, HUD 
believes that conditions outlined in the rule provide sufficient 
assurances with respect to any review accepted through this adoption 
process. HUD does not accept these recommendations and no changes are 
made in response to this comment.
    In response to a comment, HUD has made a minor change for 
consistency of terminology in Sec. 55.1(c)(3)(i). The term 
``substantial rehabilitation'' has been changed to ``substantial 
improvement'' to be consistent with the terminology defined in 
Sec. 55.2.
    A commenter suggested that in Sec. 55.20(a), Step 1 of the decision 
making process, and in the corresponding discussion in the preamble to 
the proposed rule, the language be revised to reflect that the decision 
to allow the proposed action to take place in a floodplain or wetland 
will be based on the determination that such a site is the only 
practicable alternative for such an action. This comment has not been 
adopted since the suggested language is not germane to Step 1 of the 
decision making process (determining whether the action is located in a 
floodplain) and the topic is covered in Steps 3 and 7 (Sec. 55.20 (c) 
and (g)) as set out in the proposed rule.
    A commenter suggested that a definition of the term ``practicable'' 
which is similar to that provided in guidelines under the Clean Water 
Act 404 program and in the Executive Order be included in Sec. 55.2. 
HUD has not adopted this suggestion. While neither Executive Order 
contains a definition of ``practicable'', the Floodplain Management 
Guidelines do contain a definition of this term, and the definitions 
contained in the Guidelines are explicitly incorporated by reference 
into part 55 under Sec. 55.2(a).
    A commenter stated that under Sec. 55.20(g)(3) (Step 7), mitigation 
should be required and not left as an option, and suggested that 
additional language consistent with EPA/Corps mitigation procedures be 
added that would refer to measures designed to compensate for any 
unavoidable adverse impacts remaining after appropriate and practicable 
minimization.
    HUD has not adopted this suggestion. Section 55.20(g)(3), which 
refers to ``mitigation measures to be taken to minimize adverse impacts 
and to restore and preserve natural and beneficial values'', does not 
imply that such measures are optional. Moreover, to the extent that the 
additional language suggested by the commenter would require more than 
practicable minimization, along with restoration and preservation, the 
suggested language goes beyond what is required by the floodplain 
management executive order.
    HUD has made additional changes from the proposed rule. Section 
55.1(b) of the proposed rule set out the prohibition in section 202(a) 
of the Flood Disaster Protection Act of 1973 (FDPA) against financial 
assistance for acquisition or construction purposes in special flood 
hazard areas in communities that are not participating in the National 
Flood Insurance Program. Section 55.1(b) also listed three HUD programs 
involving formula grants to states to which this prohibition does not 
apply. The prohibition is inapplicable to those programs because 
section 3(a)(3) of the FDPA defines ``financial assistance'' to which 
the prohibition applies as any form of Federal assistance ``other than 
general or special revenue sharing or formula grants made to States'' 
(emphasis added). After the publication of the proposed rule, title II 
of the Cranston-Gonzalez National Affordable Housing Act (Pub.L. 101-
625) enacted the HOME Investment in Affordable Housing (or HOME) 
program, under which funds will be provided to states (as well as local 
governments) by formula. Accordingly, HUD is revising the third 
sentence in Sec. 55.1(b) of this final rule to add a reference to HOME 
funds provided to a state as one of the programs to which the 
prohibition does not apply. In addition, the sentence is being revised 
to indicate in more general terms that the prohibition does not apply 
to HUD financial assistance in the form of formula grants to states, 
including the programs listed. HUD has determined that public comment 
on these changes is unnecessary since the changes merely reflect the 
provisions of the FDPA and the enactment of an additional HUD program 
that falls within the FDPA exception for formula grants to states.
    In the definition of ``substantial improvement'' in 
Sec. 55.2(b)(9)(i), the word ``modernization'' has been added to the 
proposed rule's reference to ``repair, reconstruction, or improvement'' 
in paragraphs (A) and (B). This change merely adds a term often used in 
HUD assisted housing programs and does not change the scope of the 
definition.
    In Sec. 55.12(a), which lists programs to which certain decision 
making steps will not apply, paragraph (2) lists HUD's actions under 
section 223(f) of the National Housing Act for the purchase or 
refinancing of existing multifamily housing projects. The final rule 
has been revised to explicitly indicate that such projects include 
hospitals, nursing homes, board and care facilities, and intermediate 
care facilities. This change is made to clarify the Department's intent 
that all types of projects that may be insured under authority of 
section 223(f) would be covered by Sec. 55.12(a)(2).
    The final rule also includes a new paragraph (3) in Sec. 55.12(a). 
Paragraph (3) indicates that Steps 2, 3, and 7 of the decision making 
process will not apply to certain HUD mortgage insurance actions for 
the repair, rehabilitation, modernization or improvement of existing 
multifamily housing projects (including nursing homes, board and care 
facilities and intermediate care facilities) and existing one- to four-
family properties, just as these steps will not apply to Section 223(f) 
actions and certain property disposition actions. The housing mortgage 
insurance actions listed in paragraph (3) include actions that are in 
communities in good standing in the Regular Program of the NFIP, and 
that involve work which does not increase the number of units more than 
20 percent, involve a conversion from nonresidential to residential 
land use, or significantly increase the footprint of the structure or 
paved areas. HUD has determined that these types of repair, 
rehabilitation, modernization and improvement projects have a de 
minimis impact on floodplain development and that the decision making 
steps involving public notices and identification of alternatives would 
serve no practical purpose in the context of this work on existing 
housing projects and units.
    The final rule revises paragraph (1) of Sec. 55.12(b), which lists 
categories of proposed actions to which the decision making process 
under the Order will not apply. Paragraph (1), as contained in the 
proposed rule, listed HUD's mortgage insurance actions for the 
purchasing, mortgaging or refinancing of existing one- to four-family 
properties in communities in good standing in the regular program of 
the NFIP, other than critical actions and properties in a floodway or 
coastal high hazard area. The final rule lists mortgage insurance 
actions and other financial assistance for the purchasing, mortgaging 
or refinancing of such properties. HUD has determined not to limit this 
provision to mortgage insurance actions, when activities under other 
HUD programs, such as the HOME Investment Partnerships Program (see 24 
CFR part 92), may include assistance for the purchase of existing one- 
to four-family properties, with equally de minimis impacts on 
floodplain development.
    The final rule also includes a revision to Sec. 55.12(b)(3). As 
originally proposed, this section excluded from the decision making 
process those HUD actions involving the disposition of individual HUD-
acquired one- to four-family properties, in communities that are in 
good standing under the NFIP. On April 16, 1992, as part of a proposed 
rule eliminating HUD's subdivision review process, HUD proposed a 
revision to Sec. 55.12(b)(3) that would eliminate the condition that 
the properties be in communities in good standing under the NFIP (57 FR 
13592). This final rule contains the April 16, 1992 revision. A second 
proposed part 55 revision contained in the April 16, 1992 proposal 
would have added a paragraph (13) to Sec. 55.12(c), which would have 
excluded from part 55 HUD's endorsement of mortgage insurance on one- 
to four-family properties located in a wetland and processed by a 
Direct Endorsement lender without prior HUD review. That revision is 
not adopted because this final rule does not address wetlands.
    In Sec. 55.12(c), which lists HUD actions to which part 55 does not 
apply, paragraph (7) of the proposed rule listed actions for interim 
assistance or emergency activities involving imminent threats to health 
and safety. The final rule revises paragraph (7) to also list 
assistance under the Fire Safety Equipment Loan Insurance Program under 
section 232(i) of the National Housing Act as an activity to which part 
55 does not apply. This program provides loans to existing nursing 
homes, intermediate care facilities and board and care facilities for 
the limited purpose of purchasing and installing fire safety equipment 
necessary for compliance with the 1987 edition of the Life Safety Code 
of the National Fire Protection Association or other codes approved by 
the Secretary of Health and Human Services or mandated by a State under 
the Social Security Act. Because this assistance is for improvements 
limited to fire safety equipment and is provided to existing 
facilities, it has little or no impact on floodplain development. 
Accordingly, HUD finds that, as with the other programs listed in 
Sec. 55.12 (b) and (c), compliance with the Executive Order would serve 
no functional purpose for this program.
    Section 55.20(e), which sets out Step 5 of the eight step decision 
making process, has been revised in the second sentence to indicate 
that all critical actions in the 500-year floodplain shall, in the case 
of new construction, be designed and built at or above the 100-year 
floodplain. This language is not a new requirement, but is merely added 
to clarify that critical actions, like non-critical actions, must be 
built at the 100-year level, and that there is no additional 
requirement that they be elevated to the 500-year flood level.
    Finally, Sec. 55.23 of the proposed rule has been removed as 
unnecessary. Section 55.23 would have required that any HUD document 
notifying the public of the availability of funds for a program (e.g., 
Notices of Funding Availability (NOFAs) published in the Federal 
Register) indicate that all proposed sites in a floodplain or wetland 
are subject to compliance with part 55, and that grant recipients also 
comply with this requirement. HUD has determined that specific 
reference to part 55 in all such documents is duplicative. HUD intends 
that its NOFAs and/or the relevant HUD regulations or program 
guidelines will set forth the requirements, as applicable, for 
compliance with HUD's environmental procedures in 24 CFR part 50 or 58. 
Parts 50 and 58 will, with this final rule, specifically require 
compliance with part 55 along with a number of other environmental laws 
and authorities. Grant recipients that assume responsibility for 
compliance with environmental requirements under part 58 are 
responsible for assuring that the procedures required under part 55 are 
carried out. Accordingly, a specific requirement that compliance with 
part 55 be singled out for reference in all such HUD and grantee 
documents is unnecessary.

Comments on Part 200 (Minimum Property Standards)

    As indicated above, the preamble to the proposed rule also 
requested comment on an alternative standard, not set out in the 
proposed rule, that would amend the MPS to require a one-foot freeboard 
above the FEMA 100-year flood level for one- and two-family dwellings 
without basements and in coastal high hazard areas. This standard would 
exceed the FEMA-required minimum elevation of these types of structure 
by one foot. As reflected in lower National Flood Insurance premiums 
for the higher elevation, discussed in the preamble to the proposed 
rule, this standard would reduce the chances that a home located in a 
special flood hazard area or coastal high hazard area would be flooded 
and would also reduce property damage to the structure and danger to 
the residents where elevation of a particular flood somewhat exceeds 
the base flood level, but it would increase the cost of constructing 
homes.
    This alternative standard would require an increase in construction 
cost due to the necessity for one additional foot of fill in the case 
of slab construction, but lower flood insurance premiums over the 
period of homeownership would generally result in net savings for the 
homeowner.
    The decreased chance of flooding and property damage would also 
result in a reduction in risks of loss to the FHA insurance funds from 
such damage for houses that are acquired by HUD following defaults by 
mortgagors, since HUD self-insures against flood and other losses 
during the period it holds such properties.
    Two commenters supported the higher MPS elevation requirement, 
citing the additional protection from flood damage and the hardships of 
flooding for the homeowner, as well as the potential reduction of costs 
to the Federal Government in the areas of income tax casualty loss 
deductions and Federal individual family grants and temporary housing 
costs provided to persons affected by flooding. However, three of the 
four Federal Government agencies that commented on the proposed rule 
did not address the one-foot freeboard proposal, and the fourth agency, 
while generally supportive of the proposal, did not specifically prefer 
it over the 100-year flood elevation proposal.
    In view of the apparent absence of a broad base of support for this 
proposal, along with the fact that it is not an explicit requirement of 
Executive Order 11988 and exceeds the requirements of the National 
Flood Insurance Program, HUD has determined not to proceed with the 
adoption of a one-foot freeboard requirement in this rulemaking. HUD 
may propose the adoption of a freeboard requirement in a separate 
rulemaking. Accordingly, the text of Sec. 200.926d as proposed will be 
adopted, with only technical corrections in response to FEMA comments. 
This Final Rule will not contain a freeboard requirement.
    In response to a comment, HUD has made a minor change in the MPS 
for consistency with NFIP requirements in 44 CFR 60.3(e). Section 
200.296d(c)(4)(iii)(B) has been changed to require that ``the bottom of 
the lowest structural member of the lowest floor (excluding pilings and 
columns) and its horizontal supports''--rather than ``the underside of 
the lowest floor of the structure and its horizontal supports''--shall 
be at or above the base flood level.
    With regard to the proposed MPS language in 
Sec. 200.926d(c)(4)(iii) regarding properties in coastal high hazard 
areas, a commenter suggested that if HUD is referring to the 
``stillwater'' base flood elevations in coastal numbered A-zones, HUD 
should consider a greater level of protection for those structures in 
A-zones closer to the V-zones, where velocity and wave conditions would 
exist.
    HUD has not adopted this comment. While there are some coastal high 
hazard areas that are based on stillwater elevations, it is HUD's 
understanding that eventually 100-year flood elevation levels for all 
coastal high hazard areas will be based on consideration of velocity 
and wave conditions rather than stillwater elevations. In the interim, 
in those coastal high hazard areas where only stillwater elevations are 
indicated on FEMA maps, it is not practicable, in HUD's view, to 
establish MPS elevation requirements that vary from the elevations 
shown on the FEMA maps.
    One commenter commended HUD for supporting recognition of the 100-
year flood standard and the NFIP regulations, but suggested that there 
was no benefit to the citation, in the MPS for residential structures 
with basements (Sec. 200.926d(c)(4)(i)), of NFIP regulations allowing 
variances and exceptions (44 CFR 60.6 (a) & (c)), since false 
expectations might be raised that variances are easily obtained.
    It is not HUD's objective to raise false expectations of easily 
obtainable variances or exceptions. However, HUD believes that this 
reference is necessary to provide a basis for HUD to except properties 
from the MPS elevation requirement where a community has previously 
approved new construction with either a variance or an exception. 
Without this provision, HUD would be placed in the position of 
rejecting properties at elevations approved by local governments in the 
exercise of their authority under the NFIP. The final rule will leave 
the references as proposed.

III. Other Matters

Paperwork Reduction Act

    Both reporting and recordkeeping requirements exist in 24 CFR 
55.27. That section, ``Documentation'', sets out the several areas of 
part 55 that require information collections.
    Collectively, the reporting and recordkeeping requirements 
contained in this rule will affect an estimated 3200 applicants and 
grantees, each with an estimated .40 hours required to respond to the 
required questions. Accordingly, the total estimated additional 
information collection burden represented by the rule is 1280 hours.

Executive Order 12606

    The General Counsel, as the Designated Official under Executive 
Order 12606, The Family, has determined that this rule will not have a 
potential significant impact on the formation, maintenance, and general 
well-being of families.

Executive Order 12612

    The General Counsel has also determined, as the Designated Official 
for HUD under section 6(a) of Executive Order 12612, Federalism, that 
some of the policies contained in the rule have federalism 
implications. The regulation implements an eight-step decision making 
process under Executive Order 11988 for considering locational 
alternatives and design modifications to lessen risk and impact for 
HUD-assisted actions proposed for floodplains, and for choosing sites 
outside the floodplain where practicable. While HUD carries out this 
process for most HUD programs, the regulation will require states and 
units of general local government to carry out the eight-step process 
and other requirements of the rule if they are applicants that assume 
environmental review responsibilities under section 104(g) of the 
Housing and Community Development Act of 1974 (HCD Act of 1974) or 
under section 288 of the Cranston-Gonzalez National Affordable Housing 
Act (NAHA) and HUD's implementing regulations in part 58. However, 
further review under Executive Order 12612 is not considered necessary 
because HUD has little or no discretion in requiring states and units 
of general local government to carry out the requirements of the rule 
where they assume other responsibilities under section 104(g) or 
section 288. Section 9 of E.O. 11988 provides that the responsibilities 
under the order may be assumed by applicants that assume environmental 
review responsibilities under the National Environmental Policy Act of 
1969 (NEPA), for projects covered by section 104(h) (now 104(g)) of the 
HCD of 1974. The executive order thus contemplates state and local 
assumption of responsibilities under the orders whenever 
responsibilities under NEPA (and, under later amendment to section 104, 
responsibilities under other provisions of law to be specified by the 
Secretary) are assumed. As a practical matter, bifurcation of NEPA and 
Executive Order 11988 responsibilities would not be feasible. The 
language of section 288 of NAHA clearly is patterned on section 104(g) 
and contemplates state and local assumption of the same 
responsibilities. Review under Executive Order 12612 is also 
unnecessary because HUD's regulations at 24 CFR part 58, implementing 
section 104(g) of the HCD Act of 1974, have long provided for state and 
local governmental assumption of NEPA, Executive Order, and other 
environmental review responsibilities. State and local governments thus 
already have been assuming and carrying out these responsibilities for 
many years. Part 55 merely describes and codifies more specifically the 
implementing policies and procedures under Executive Order 11988.

Executive Order 12866

    This rule was reviewed as a significant rule and approved by the 
Office of Management and Budget (OMB) under Executive Order 12866, 
Regulatory Planning and Review, which was signed by the President on 
September 30, 1993.

Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the 
Secretary, by approving this rule, certifies that the rule does not 
have a significant economic impact on a substantial number of small 
entities. This rule does not prohibit HUD support of activities in 
floodplains (except for certain activities in floodways and coastal 
high hazard areas), but rather it creates a consistent departmental 
policy governing such support. The revision of Sec. 200.926d(c)(4) of 
the HUD MPS regulations merely maintains the current Federal standard 
under Executive Order 11988 and FEMA's NFIP regulations, in addition to 
incorporating current HUD mortgage underwriting standards and Field 
Office floodplain engineering standards.

NEPA

    A Finding of No Significant Impact with respect to the environment 
has been made in accordance with HUD regulations in 24 CFR part 50 
which implement section 102(2)(C) of the National Environmental Policy 
Act of 1969 (42 U.S.C. 4332). The Finding is available for public 
inspection during regular business hours in the Office of the Rules 
Docket Clerk, Office of the General Counsel, room 10276, 451 Seventh 
Street SW., Washington, DC 20410.

Semiannual Agenda of Regulations

    This rule is listed as item number 1468 in the Department's 
Semiannual Agenda of Regulations published on October 25, 1993 (58 FR 
56402, 56415) under Executive Order 12291 and the Regulatory Agenda.

Catalog of Federal Domestic Assistance

    The programs affected by this rule are listed in the Catalog of 
Federal Domestic Assistance under program numbers 14.103 through 
14.852.

List of Subjects

24 CFR Part 50

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

24 CFR Part 55

    Environmental protection, Floodplain management and the protection 
of wetlands.

24 CFR Part 58

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

24 CFR Part 200

    Administrative practice and procedure, Claims, Equal employment 
opportunity, Fair housing, Housing standards, Incorporation by 
reference, Lead poisoning, Loan programs--housing and community 
development, Minimum Property Standards, Mortgage insurance, 
Organization and functions (Government agencies), Penalties, Reporting 
and recordkeeping requirements, Social security, Unemployment 
compensation, Wages.

    Accordingly, 24 CFR parts 50, 58, and 200 are amended, and a new 
part 55, consisting of Secs. 55.1 through 55.27, is added, as follows:

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

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

    Authority: 42 U.S.C. 3535(d), 4332; and Executive Order 11991, 
42 FR 26967 (May 24, 1977).

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


Sec. 50.4   Other environmental statutes, Executive orders and HUD 
standards.

* * * * *
    (b) Floodplain management and wetland protection. (1) Flood 
Disaster Protection Act of 1973 (42 U.S.C. 4001-4128).
    (2) Executive Order 11988 (Floodplain Management), 42 FR 26951 (May 
25, 1977), as interpreted in HUD regulations at 24 CFR part 55, and 
Executive Order 11990 (Protection of Wetlands), 42 FR 26961 (May 25, 
1977). (For an explanation of the relationship between the decision 
making process in this 24 CFR part 55 and in this part, see Sec. 55.10 
of this chapter.)
* * * * *
    3. A new part 55 (consisting of Secs. 55.1 through 55.27) is added 
to title 24, to read as follows:

PART 55--FLOODPLAIN MANAGEMENT

Subpart A--General

Sec.
55.1  Purpose and basic responsibility.
55.2  Terminology.
55.3  Assignment of responsibilities.
Subpart B--Application of Executive Order on Floodplain Management
55.10  Environmental review procedures under 24 CFR parts 50 and 58.
55.11  Applicability of Subpart C decision making process.
55.12  Inapplicability of 24 CFR part 55 to certain categories of 
proposed actions.
Subpart C--Procedures for Making Determinations on Floodplain 
Management
55.20  Decision making process.
55.21  Notification of floodplain hazard.
55.22  Conveyance restrictions for the disposition of real property.
55.23  Reserved.
55.24  Aggregation.
55.25  Areawide compliance.
55.26  Adoption of another agency's review under the executive 
orders.
55.27  Documentation.

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

Subpart A--General


Sec. 55.1  Purpose and basic responsibility.

    (a) This part implements the requirements of Executive Order 11988, 
Floodplain Management, and employs the principles of the Unified 
National Program for Floodplain Management. It covers the proposed 
acquisition, construction, improvement, disposition, financing and use 
of properties located in a floodplain for which approval is required 
either from HUD under any applicable HUD program or from a grant 
recipient subject to 24 CFR part 58. This part does not prohibit 
approval of such actions (except for certain actions in high hazard 
areas), but provides a consistent means for implementing the 
Department's interpretation of the executive order in the project 
approval decision making processes of HUD and of grant recipients 
subject to 24 CFR part 58. The implementation of Executive Order 11988 
under this part shall be conducted by HUD, for Department-administered 
programs subject to environmental review under 24 CFR part 50, and by 
authorized recipients of HUD financial assistance subject to 
environmental review under 24 CFR part 58.
    (b) Under section 202(a) of the Flood Disaster Protection Act of 
1973, 42 U.S.C. 4106(a), proposed HUD financial assistance (including 
mortgage insurance) for acquisition or construction purposes in any 
``area having special flood hazards'' (a flood zone designated by the 
Federal Emergency Management Agency (FEMA)) shall not be approved in 
communities identified by FEMA as eligible for flood insurance but 
which are not participating in the National Flood Insurance Program. 
This prohibition only applies to proposed HUD financial assistance in a 
FEMA-designated area of special flood hazard one year after the 
community has been formally notified by FEMA of the designation of the 
affected area. This prohibition is not applicable to HUD financial 
assistance in the form of formula grants to states, including financial 
assistance under the State-administered CDBG Program (24 CFR part 570, 
subpart I) and the State-administered Rental Rehabilitation Program (24 
CFR 511.51), Emergency Shelter Grant amounts allocated to States (24 
CFR parts 575 and 576), and HOME funds provided to a state under Title 
II of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12701-12839).
    (c) Except with respect to actions listed in Sec. 55.12(c), no HUD 
financial assistance (including mortgage insurance) may be approved 
after May 23, 1994 with respect to:
    (1) Any action, other than a functionally dependent use, located in 
a floodway;
    (2) Any critical action located in a coastal high hazard area; or
    (3) Any non-critical action located in a coastal high hazard area, 
unless the action is designed for location in a coastal high hazard 
area or is a functionally dependent use. An action will be considered 
to be designed for location in a coastal high hazard area if:
    (i) In the case of new construction or substantial improvement, the 
work meets the current standards for V zones in FEMA regulations (44 
CFR 60.3(e)) and, if applicable, the Minimum Property Standards for 
such construction in 24 CFR 200.926d(c)(4)(iii); or
    (ii) In the case of existing construction (including any minor 
improvements):
    (A) The work met FEMA elevation and construction standards for a 
coastal high hazard area (or if such a zone or such standards were not 
designated, the 100-year floodplain) applicable at the time the 
original improvements were constructed; or
    (B) If the original improvements were constructed before FEMA 
standards for the 100-year floodplain became effective or before FEMA 
designated the location of the action as within the 100-year 
floodplain, the work would meet at least the earliest FEMA standards 
for construction in the 100-year floodplain.


Sec. 55.2  Terminology.

    (a) With the exception of those terms defined in paragraph (b) of 
this section, the terms used in this part shall follow the definitions 
contained in section 6 of Executive Order 11988 and in the Floodplain 
Management Guidelines for Implementing Executive Order 11988 (43 FR 
6030, February 10, 1978) issued by the Water Resources Council; and the 
terms ``criteria'' and ``Regular Program'', shall follow the 
definitions contained in FEMA regulations at 44 CFR 59.1.
    (b) The definitions of the following terms in Executive Order 11988 
and related documents affecting this part are modified for purposes of 
this part:
    (1) Coastal high hazard area means the area subject to high 
velocity waters, including but not limited to hurricane wave wash or 
tsunamis. The area is designated on a Flood Insurance Rate Map (FIRM) 
under FEMA regulations as Zone V1-30, VE, or V. (FIRMs as well as Flood 
Hazard Boundary Maps (FHBM) shall also be relied on for the delineation 
of ``100-year floodplains'' (Sec. 55.2(b)(8)), ``500-year floodplains'' 
(Sec. 55.2(b)(3)), and ``floodways'' (Sec. 55.2(b)(4)).
    (2)(i) (Critical action means any activity for which even a slight 
chance of flooding would be too great, because such flooding might 
result in loss of life, injury to persons, or damage to property. 
Critical actions include activities that create, maintain or extend the 
useful life of those structures or facilities that:
    (A) Produce, use or store highly volatile, flammable, explosive, 
toxic or water-reactive materials;
    (B) Provide essential and irreplaceable records or utility or 
emergency services that may become lost or inoperative during flood and 
storm events (e.g., data storage centers, generating plants, principal 
utility lines, emergency operations centers including fire and police 
stations, and roadways providing sole egress from flood-prone areas); 
or
    (C) Are likely to contain occupants who may not be sufficiently 
mobile to avoid loss of life or injury during flood or storm events, 
e.g., persons who reside in hospitals, nursing homes, convalescent 
homes, intermediate care facilities, board and care facilities, and 
retirement service centers. Housing for independent living for the 
elderly is not considered a critical action.
    (ii) Critical actions shall not be approved in floodways or coastal 
high hazard areas.
    (3) 500-year floodplain means the minimum floodplain of concern for 
Critical Actions and is the area subject to inundation from a flood 
having a 0.2 percent chance of occurring in any given year. (See 
Sec. 55.2(b)(1) for appropriate data sources.)
    (4) Floodway means that portion of the floodplain which is 
effective in carrying flow, where the flood hazard is generally the 
greatest, and where water depths and velocities are the highest. The 
term ``floodway'' as used here is consistent with ``regulatory 
floodways'' as identified by FEMA. (See Sec. 55.2(b)(1) for appropriate 
data sources.)
    (5) Functionally dependent use means a land use that must 
necessarily be conducted in close proximity to water (e.g., a dam, 
marina, port facility, water-front park, and many types of bridges).
    (6) High hazard area means a floodway or a coastal high hazard 
area.
    (7) 100-year floodplain means the floodplain of concern for this 
part and is the area subject to a one percent or greater chance of 
flooding in any given year. (See Sec. 55.2(b)(1) for appropriate data 
sources.)
    (8)(i) Substantial improvement means either:
    (A) Any repair, reconstruction, modernization or improvement of a 
structure, the cost of which equals or exceeds 50 percent of the market 
value of the structure either:
    (1) Before the improvement or repair is started; or
    (2) If the structure has been damaged, and is being restored, 
before the damage occurred; or
    (B) Any repair, reconstruction, modernization or improvement of a 
structure that results in an increase of more than twenty percent in 
the number of dwelling units in a residential project or in the average 
peak number of customers and employees likely to be on-site at any one 
time for a commercial or industrial project.
    (ii) Substantial improvement may not be defined to include either:
    (A) Any project for improvement of a structure to comply with 
existing state or local health, sanitary or safety code specifications 
that is solely necessary to assure safe living conditions, or
    (B) Any alteration of a structure listed on the National Register 
of Historical Places or on a State Inventory of Historic Places.
    (iii) Structural repairs, reconstruction, or improvements not 
meeting this definition are considered ``minor improvements''.


Sec. 55.3  Assignment of responsibilities.

    (a)(1) The Assistant Secretary for Community Planning and 
Development (CPD) shall oversee: (i) The Department's implementation of 
the order and this part in all HUD programs, and
    (ii) The implementation activities of HUD program managers and 
grant recipients for HUD financial assistance subject to 24 CFR part 
58.
    (2) In performing these responsibilities, the Assistant Secretary 
for CPD shall make pertinent policy determinations in cooperation with 
appropriate program offices and provide necessary assistance, training, 
publications, and procedural guidance.
    (b) Other HUD Assistant Secretaries, the General Counsel, and the 
President of the Government National Mortgage Association (GNMA) shall: 
(1) Ensure compliance with this part for all actions under their 
jurisdiction that are proposed to be conducted, supported, or permitted 
in a floodplain;
    (2) Ensure that actions approved by HUD or grant recipients are 
monitored and that any prescribed mitigation is implemented;
    (3) Ensure that the offices under their jurisdiction have the 
technical resources to implement the requirements of this part; and
    (4) Incorporate in departmental regulations, handbooks, and project 
and site standards those criteria, standards, and procedures necessary 
to comply with the requirements of this part.
    (c) Recipient Certifying Officer. In accordance with section 9 of 
Executive Order 11988, Certifying Officers of grant recipients 
administering activities subject to 24 CFR part 58 shall: (1) Comply 
with this part in carrying out HUD-assisted programs, and
    (2) Monitor approved actions and ensure that any prescribed 
mitigation is implemented.

Subpart B--Application of Executive Order on Floodplain Management


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

    (a) Where an environmental review is required under the National 
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4332, and 24 CFR 
part 50 or part 58, compliance with this part shall be completed before 
the completion of an environmental assessment (EA) including a finding 
of no significant environmental impact (FONSI), or an environmental 
impact statement (EIS), in accordance with the decision points listed 
in 24 CFR 50.17 (a) through (h), or before the preparation of an EA 
under 24 CFR 58.40 or an EIS under 24 CFR 58.36. For types of proposed 
actions that are categorically excluded from National Environmental 
Policy Act (NEPA) requirements under 24 CFR part 50 (or part 58), 
compliance with this part shall be completed before the Department's 
initial (SAMA, conditional, etc.) approval (or the conditional 
commitment or approval by a grant recipient subject to 24 CFR part 58) 
of proposed actions in a floodplain.
    (b) The categorical exclusion of certain proposed actions from 
environmental review requirements under NEPA and 24 CFR parts 50 and 58 
(see 24 CFR 50.20 and 58.35) does not exclude those actions from 
compliance with this part.


Sec. 55.11  Applicability of subpart C decision making process.

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

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

Sec. 55.12  Inapplicability of 24 CFR part 55 to certain categories of 
proposed actions.

    (a) The decision making steps in Sec. 55.20(b), (c) and (g) (steps 
2, 3 and 7) shall not apply to the following categories of proposed 
actions: (1) HUD actions involving the disposition of HUD-acquired 
multifamily housing projects or ``bulk sales'' of HUD-acquired one- to 
four-family properties in communities that are in the Regular Program 
of the National Flood Insurance Program (NFIP) and in good standing 
(i.e., not suspended from program eligibility or placed on probation 
under 44 CFR 59.24).
    (2) HUD's actions under section 223(f) of the National Housing Act 
(12 U.S.C. 1715n(f)) for the purchase or refinancing of existing 
multifamily housing projects (including hospitals, nursing homes, board 
and care facilities, and intermediate care facilities) in communities 
that are in good standing under the NFIP.
    (3) HUD mortgage insurance actions for the repair, rehabilitation, 
modernization or improvement of existing multifamily housing projects 
(including nursing homes, board and care facilities and intermediate 
care facilities) and existing one- to four-family properties, in 
communities that are in the Regular Program of the NFIP and are in good 
standing, provided that the number of units is not increased more than 
20 percent, the action does not involve a conversion from 
nonresidential to residential land use, and the footprint of the 
structure and paved areas is not significantly increased.
    (b) The decision making process in Sec. 55.20 shall not apply to 
the following categories of proposed actions: (1) HUD's mortgage 
insurance actions and other financial assistance for the purchasing, 
mortgaging or refinancing of existing one- to four-family properties in 
communities that are in the Regular Program of the National Flood 
Insurance Program (NFIP) and in good standing (i.e., not suspended from 
program eligibility or placed on probation under 44 CFR 59.24), where 
the action is not a critical action and the property is not located in 
a floodway or coastal high hazard area;
    (2) Financial assistance for minor repairs or improvements on one- 
to four-family properties that do not meet the thresholds for 
``substantial improvement'' under Sec. 55.2(b)(9);
    (3) HUD actions involving the disposition of individual HUD-
acquired, one- to four-family properties.
    (c) This part shall not apply to the following categories of 
proposed HUD actions:
    (1) HUD-assisted exempt activities described in 24 CFR 58.34;
    (2) Policy level actions described at 24 CFR 50.16 that do not 
involve site-based decisions;
    (3) HUD's implementation of the full disclosure and other 
registration requirements of the Interstate Land Sales Disclosure Act 
(15 U.S.C. 1701--1720);
    (4) An action involving a repossession, receivership, foreclosure, 
or similar acquisition of property to protect or enforce HUD's 
financial interests under previously approved loans, grants, mortgage 
insurance, or other HUD assistance;
    (5) A minor amendment to a previously approved action with no 
additional adverse impact on or from a floodplain;
    (6) HUD's approval of a project site, an incidental portion of 
which is situated in an adjacent floodplain, but only if: (i) The 
proposed construction and landscaping activities (except for minor 
grubbing, clearing of debris, pruning, sodding, seeding, etc.) do not 
occupy or modify the 100-year floodplain or the 500-year floodplain 
(for Critical Actions);
    (ii) Appropriate provision is made for site drainage; and
    (iii) A covenant or comparable restriction is placed on the 
property's continued use to preserve the floodplain;
    (7) An action for interim assistance, assistance under the section 
232(i) Fire Safety Equipment Loan Insurance Program, or emergency 
activities involving imminent threats to health and safety, and limited 
to necessary protection, repair or restoration activities to control 
the imminent risk or damage;
    (8) HUD's approval of financial assistance for a project on any 
site in a floodplain for which FEMA has issued:
    (i) A final Letter of Map Amendment (LOMA) or final Letter of Map 
Revision (LOMR) that removed the property from a FEMA-designated 
floodplain location; or
    (ii) A conditional LOMA or conditional LOMR if the HUD approval is 
subject to the requirements and conditions of the conditional LOMA or 
conditional LOMR;
    (9) HUD's acceptance of a housing subdivision approval action by 
the Department of Veterans Affairs or Farmers Home Administration in 
accordance with section 535 of the Housing Act of 1949 (42 U.S.C. 
1490o);
    (10) An action that was, on May 23, 1994, already approved by HUD 
(or a grant recipient subject to 24 CFR part 58) and is being 
implemented (unless approval is requested for a new reviewable action), 
provided that Secs. 55.21 and 55.22 apply where the covered 
transactions under those sections have not yet occurred, and that any 
hazard minimization measures required by HUD (or a grant recipient 
subject to 24 CFR part 58) under its implementation of Executive Order 
11988 before May 23, 1994 shall be completed;
    (11) Issuance or use of Housing Vouchers, Certificates under the 
Section 8 Existing Housing Program, or other forms of rental subsidy 
where HUD, the awarding community, or the public housing agency that 
administers the contract awards rental subsidies that are not project-
based (i.e., do not involve site-specific subsidies); and
    (12) Secondary mortgage operations of the Government National 
Mortgage Association (GNMA).

Subpart C--Procedures for Making Determinations on Floodplain 
Management


Sec. 55.20  Decision making process.

    The decision making process for compliance with this part contains 
eight steps, including public notices and an examination of practicable 
alternatives. The steps to be followed in the decision making process 
are:
    (a) Step 1. Determine whether the proposed action is located in a 
100-year floodplain (or a 500-year floodplain for a Critical Action). 
If the proposed action would not be conducted in one of those 
locations, then no further compliance with this part is required.
    (b) Step 2. Notify the public at the earliest possible time of a 
proposal to consider an action in a floodplain (or in the 500-year 
floodplain for a Critical Action), and involve the affected and 
interested public in the decision making process.
    (1) The public notices required by paragraphs (b) and (g) of this 
section may be combined with other project notices wherever 
appropriate. Notices required under this part must be bilingual if the 
affected public is largely non-English speaking. In addition, all 
notices must be published in an appropriate local printed news medium, 
and must be sent to federal, state, and local public agencies, 
organizations, and, where not otherwise covered, individuals known to 
be interested in the proposed action.
    (2) A minimum of 15 calendar days shall be allowed for comment on 
the public notice.
    (3) A notice under this paragraph shall state: the name, proposed 
location and description of the activity; the total number of acres of 
floodplain involved; and the HUD official and phone number to contact 
for information. The notice shall indicate the hours and the HUD office 
at which a full description of the proposed action may be reviewed.
    (c) Step 3. Identify and evaluate practicable alternatives to 
locating the proposed action in a floodplain (or the 500-year 
floodplain for a Critical Action).
    (1) The consideration of practicable alternatives to the proposed 
site or method may include:
    (i) Locations outside the floodplain (or 500-year floodplain for a 
Critical Action);
    (ii) Alternative methods to serve the identical project objective; 
and
    (iii) A determination not to approve any action.
    (2) In reviewing practicable alternatives, the Department or a 
grant recipient subject to 24 CFR part 58 shall consider feasible 
technological alternatives, hazard reduction methods and related 
mitigation costs, and environmental impacts.
    (d) Step 4. Identify the potential direct and indirect impacts 
associated with the occupancy or modification of the floodplain (or 
500-year floodplain for a Critical Action).
    (e) Step 5. Where practicable, design or modify the proposed action 
to minimize the potential adverse impacts within the floodplain 
(including the 500-year floodplain for a Critical Action) and to 
restore and preserve its natural and beneficial values. All critical 
actions in the 500-year floodplain shall be designed and built at or 
above the 100-year floodplain (in the case of new construction) and 
modified to include:
    (1) Preparation of and participation in an early warning system;
    (2) An emergency evacuation and relocation plan;
    (3) Identification of evacuation route(s) out of the 500-year 
floodplain; and
    (4) Identification marks of past or estimated flood levels on all 
structures.
    (f) Step 6. Reevaluate the proposed action to determine:
    (1) Whether it is still practicable in light of its exposure to 
flood hazards in the floodplain, the extent to which it will aggravate 
the current hazards to other floodplains, and its potential to disrupt 
floodplain values; and
    (2) Whether alternatives preliminarily rejected at Step 3 
(paragraph (c)) of this section are practicable in light of the 
information gained in Steps 4 and 5 (paragraphs (d) and (e)) of this 
section.
    (g) Step 7. (1) If the reevaluation results in a determination that 
there is no practicable alternative to locating the proposal in the 
floodplain (or the 500-year floodplain for a Critical Action), publish 
a final notice that includes:
    (i) The reasons why the proposal must be located in the floodplain;
    (ii) A list of the alternatives considered; and
    (iii) All mitigation measures to be taken to minimize adverse 
impacts and to restore and preserve natural and beneficial values.
    (2) In addition, the public notice procedures of Sec. 55.20(b)(1) 
shall be followed, and a minimum of 7 calendar days for public comment 
before approval of the proposed action shall be provided.
    (h) Step 8. Upon completion of the decision making process in Steps 
1 through 7, implement the proposed action. There is a continuing 
responsibility to ensure that the mitigating measures identified in 
Step 7 are implemented.


Sec. 55.21  Notification of floodplain hazard.

    For HUD programs under which a financial transaction for a property 
located in a floodplain (a 500-year floodplain for a Critical Action) 
is guaranteed, approved, regulated or insured, any private party 
participating in the transaction and any current or prospective tenant 
shall be informed by HUD (or by HUD's designee, e.g., a mortgagor) or a 
grant recipient subject to 24 CFR part 58 of the hazards of the 
floodplain location before the execution of documents completing the 
transaction.


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

    (a) In the disposition (including leasing) of properties acquired 
by HUD that are located in a floodplain (a 500-year floodplain for a 
Critical Action), the documents used for the conveyance must: (1) Refer 
to those uses that are restricted under identified federal, state, or 
local floodplain regulations; and
    (2) Include any land use restrictions limiting the use of the 
property by a grantee or purchaser and any successors under state or 
local laws.
    (b)(1) For disposition of properties acquired by HUD that are 
located in a 500-year floodplain and contain Critical Actions, HUD 
shall, as a condition of approval of the disposition, require by 
covenant or comparable restriction on the property's use that the 
property owner and successive owners provide written notification to 
each current and prospective tenant concerning: (i) The hazards to life 
and to property for those persons who reside or work in a structure 
located within the 500-year floodplain, and
    (ii) The availability of flood insurance on the contents of their 
dwelling unit or business.
    (2) The notice shall also be posted in the building so that it will 
be legible at all times and easily visible to all persons entering or 
using the building.


Sec. 55.23  [Reserved]


Sec. 55.24  Aggregation.

    Where two or more actions have been proposed, require compliance 
with subpart C of this part, affect the same floodplain, and are 
currently under review by the Department (or by a grant recipient 
subject to 24 CFR part 58), individual or aggregated approvals may be 
issued. A single compliance review and approval under this section is 
subject to compliance with the decision making process in Sec. 55.20.


Sec. 55.25  Areawide compliance.

    (a) A HUD-approved areawide compliance process may be substituted 
for individual compliance or aggregated compliance under Sec. 55.24 
where a series of individual actions is proposed or contemplated in a 
pertinent area for HUD's examination of floodplain hazards. In areawide 
compliances, the area for examination may include a sector of, or the 
entire, floodplain--as relevant to the proposed or anticipated actions. 
The areawide compliance process shall be in accord with the decision 
making process under Sec. 55.20.
    (b) The areawide compliance process shall address the relevant 
executive orders and shall consider local land use planning and 
development controls (e.g., those enforced by the community for 
purposes of floodplain management under the National Flood Insurance 
Program (NFIP)) and applicable state programs for floodplain 
management. The process shall include the development and publication 
of a strategy that identifies the range of development and mitigation 
measures under which the proposed HUD assistance may be approved and 
that indicates the types of actions that will not be approved in the 
floodplain.
    (c) Individual actions that fit within the types of proposed HUD 
actions specifically addressed under the areawide compliance do not 
require further compliance with Sec. 55.20 except that a determination 
by the Department or a grant recipient subject to 24 CFR part 58 shall 
be made concerning whether the individual action accords with the 
areawide strategy. Where the individual action does not accord with the 
areawide strategy, specific development and mitigation measures shall 
be prescribed as a condition of HUD's approval of the individual 
action.
    (d) Areawide compliance under the procedures of this section is 
subject to the following provisions: (1) It shall be initiated by HUD 
through a formal agreement of understanding with affected local 
governments concerning mutual responsibilities governing the 
preparation, issuance, implementation, and enforcement of the areawide 
strategy;
    (2) It may be performed jointly with one or more Federal 
departments or agencies, or grant recipients subject to 24 CFR part 58 
that serve as the responsible Federal official;
    (3) It shall establish mechanisms to ensure that: (i) The terms of 
approval of individual actions (e.g., concerning structures and 
facilities) will be consistent with the areawide strategy;
    (ii) The controls set forth in the areawide strategy are 
implemented and enforced in a timely manner; and
    (iii) Where necessary, mitigation for individual actions will be 
established as a condition of approval.
    (4) An open scoping process (in accordance with 40 CFR 1501.7) 
shall be used for determining the scope of issues to be addressed and 
for identifying significant issues related to housing and community 
development for the floodplain;
    (5) Federal, state and local agencies with expertise in floodplain 
management, flood evacuation preparedness, land use planning and 
building regulation, or soil and natural resource conservation shall be 
invited to participate in the scoping process and to provide advice and 
comments; and
    (6) Eligibility for participation in and the use of the areawide 
compliance must be limited to communities that are in the Regular 
Program of the National Flood Insurance Program and in good standing 
(i.e., not suspended from program eligibility or placed on probation 
under 44 CFR 59.24), thereby demonstrating a capacity for and 
commitment to floodplain management standards sufficient to perform 
responsibilities under this part.
    (7) An expiration date (not to exceed ten years from the date of 
the formal adoption by the local governments) for HUD approval of 
areawide compliance under this part must be stated in the agreement 
between the local governments and HUD. In conjunction with the setting 
of an expiration date, a mechanism for HUD's reevaluation of the 
appropriateness of areawide compliance must be provided in the 
agreement.


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

    If a proposed action covered under this part is already covered in 
a prior review performed under the executive order by another agency, 
that review may be adopted by HUD or by a grant recipient authorized 
under 24 CFR part 58, provided that:
    (a) There is no pending litigation relating to the other agency's 
review for floodplain management;
    (b) The adopting agency makes a finding that:
    (1) The type of action currently proposed is comparable to the type 
of action previously reviewed by the other agency; and
    (2) There has been no material change in circumstances since the 
previous review was conducted; and
    (c) As a condition of approval, mitigation measures similar to 
those prescribed in the previous review shall be required of the 
current proposed action.


Sec. 55.27  Documentation.

    (a) For purposes of compliance with Sec. 55.20, the responsible HUD 
official who would approve the proposed action (or the Certifying 
Officer for a grant recipient subject to 24 CFR part 58) shall require 
that the following actions be documented: (1) Under Sec. 55.20(c), 
practicable alternative sites have been considered outside the 
floodplain, but within the local housing market area, the local public 
utility service area, or the jurisdictional boundaries of a recipient 
unit of general local government (as defined in 24 CFR 570.3), 
whichever geographic area is more appropriate to the proposed HUD 
action. Actual sites under review must be identified and the reasons 
for the non-selection of those sites as practicable alternatives must 
be described; and
    (2) Under Sec. 55.20(e), measures to minimize the potential adverse 
impacts of the proposed action on the affected floodplain as identified 
in Sec. 55.20(d) have been applied to the design for the proposed 
action.
    (b) For purposes of compliance with Sec. 55.24, Sec. 55.25, or 
Sec. 55.26 (as appropriate), the responsible HUD official (or the 
Certifying Officer for a grant recipient subject to 24 CFR part 58) who 
would approve the proposed action shall require documentation of 
compliance with the required conditions.
    (c) Documentation of compliance with this part (including copies of 
public notices) must be attached to the environmental assessment, the 
environmental impact statement or the compliance record and be 
maintained as a part of the project file. In addition, for 
environmental impact statements, documentation of compliance with this 
part must be included as a part of the record of decision (or 
environmental review record for grant recipients subject to 24 CFR part 
58).

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR THE COMMUNITY 
DEVELOPMENT BLOCK GRANT, RENTAL REHABILITATION AND HOUSING 
DEVELOPMENT GRANT PROGRAMS

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

    Authority: 42 U.S.C. 1437o(i)(1) and (2), 3535(d), 4332 and 
5304(g).

    5. In Sec. 58.5, paragraph (b)(1) is revised to read as follows:


Sec. 58.5  Related Federal laws and authorities.

* * * * *
    (b) Floodplain management and wetland protection. (1) Executive 
Order 11988, Floodplain Management, May 24, 1977 (42 FR 26951 et seq.), 
as interpreted in HUD regulations at 24 CFR part 55, particularly 
section 2(a) of the Order. (For an explanation of the relationship 
between the decision making process in 24 CFR part 55 and this part, 
see Sec. 55.10.)
* * * * *

PART 200--INTRODUCTION

    6. The authority citation for part 200 continues to read as 
follows:

    Authority: 12 U.S.C. 1701-1715z-18; 42 U.S.C. 3535(d).

    7. Section 200.926d is amended by revising paragraphs (c)(4)(i) 
through (iii); by redesignating paragraph (c)(4)(iv) as paragraph 
(c)(4)(vii); and by adding paragraphs (c)(4)IV, (v) and (vi), to read 
as follows:


Sec. 200.926d  Construction requirements.

* * * * *
    (c) * * *
    (4) Drainage and flood hazard exposure.--(i) Residential structures 
with basements located in FEMA-designated areas of special flood 
hazard. The elevation of the lowest floor in structures with basements 
shall be at or above the base flood level (100-year flood level) 
required for new construction or substantial improvement of residential 
structures under regulations for the National Flood Insurance Program 
(NFIP) (see 44 CFR 60.3 through 60.6), except where variances from this 
standard are granted by communities under the procedures of the Federal 
Emergency Management Agency (FEMA) at 44 CFR 60.6(a) or exceptions from 
this NFIP standard for basements are approved by FEMA in accordance 
with procedures at 44 CFR 60.6(c).
    (ii) Residential structures without basements located in FEMA-
designated areas of special flood hazard. The elevation of the lowest 
floor in structures without basements shall be at or above the FEMA-
designated base flood elevation (100-year flood level).
    (iii) Residential structures located in FEMA-designated ``coastal 
high hazard areas''. (A) Basements or any permanent enclosure of space 
below the lowest floor of a structure are prohibited.
    (B) Where FEMA has determined the base flood level without 
establishing stillwater elevations, the bottom of the lowest structural 
member of the lowest floor (excluding pilings and columns) and its 
horizontal supports shall be at or above the base flood level.
    (iv) ``Critical Actions'' as defined in 24 CFR 55.2(b)(2). The 
lowest floor of a structure (including the basement and all mechanical, 
electrical, and service equipment) shall be at or above the FEMA-
designated 500-year frequency flood elevation. ``Critical Actions'' 
located in FEMA-designated ``floodways'' (as defined in 24 CFR 
55.2(b)(4)) and ``coastal high hazard areas'' (as defined in 24 CFR 
55.2(b)(1)) are prohibited.
    (v) Streets. Streets must be usable during runoff equivalent to a 
10-year return frequency. Where drainage outfall is inadequate to 
prevent runoff equivalent to a 10-year return frequency from ponding 
over 6 inches deep, streets must be made passable for commonly used 
emergency vehicles during runoff equivalent to a 25-year return 
frequency, except where an alternative access street not subject to 
such ponding is available.
    (vi) Crawl spaces. Crawl spaces must not pond water or be subject 
to prolonged dampness.
* * * * *
    Dated: April 14, 1994.
Henry G. Cisneros,
Secretary.
[FR Doc. 94-9606 Filed 4-20-94; 8:45 am]
BILLING CODE 4210-32-P