[Federal Register Volume 61, Number 239 (Wednesday, December 11, 1996)]
[Rules and Regulations]
[Pages 65153-65157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31426]


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DEPARTMENT OF AGRICULTURE
Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
Farm Service Agency

7 CFR Parts 1924, 1942, 1948, and 1980

RIN 0575-AB59


Planning and Performing Construction and Other Development

AGENCIES: Rural Housing Service, Rural Business-Cooperative Service, 
Rural Utilities Service, and Farm Service Agency, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Housing Service (RHS), Rural Business- Cooperative 
Service (RBS), Rural Utilities Service (RUS) and Farm Service Agency 
(FSA) are amending their regulations regarding construction and other 
development for farm, housing, community and business programs. This 
action provides RHS, RBS, RUS and FSA borrowers, grant recipients and 
the public with rules for compliance with seismic safety requirements 
for new building construction using RHS, RBS, RUS and FSA loan, grant 
and guaranteed funds. This action is necessary to set forth the 
Agencies' policies and requirements to meet the implementation 
requirements of Executive Order 12699, ``Seismic Safety of Federal and 
Federally Assisted or Regulated New Building Construction,'' 55 FR 835 
(January 5, 1990). This Executive Order addresses compliance with the 
building safety provisions of the Earthquake Hazards Reduction Act of 
1977, as amended.

EFFECTIVE DATE: January 10, 1997.

FOR FURTHER INFORMATION CONTACT: Samuel J. Hodges III, Architect, 
Program Support Staff, Rural Housing Service, U.S. Department of 
Agriculture, STOP 0761, 1400 Independence Ave., SW., Washington, DC 
20250-0761, Telephone: (202) 720-9653.

SUPPLEMENTARY INFORMATION:

Classification

    This rule has been determined to be not significant for the 
purposes of Executive Order 12866 and therefore has not been reviewed 
by the Office of Management and Budget (OMB).

Paperwork Reduction Act

    The information collection requirements contained in these 
regulations have been previously approved by OMB under the provisions 
of 44 U.S.C. chapter 35 and have been assigned OMB control numbers 
0575-0042, 0575-0015, 0575-0130, and 0575-0024, in accordance with the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3507). This final rule does 
not revise or impose any new information collection or recordkeeping 
requirements from those approved by OMB.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' It is the determination of the 
issuing agencies that this action does not constitute a major Federal 
action significantly affecting the quality of the human environment, in 
accordance with the National Environmental Policy Act of 1969, Public 
Law 91-190, an Environmental Impact Statement is not required.

Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the head of the Agencies certify that this rule will not 
have a significant economic impact on a substantial number of small 
entities.
    The undersigned have determined that this action will not have a 
significant economic impact on a substantial number of small entities 
because the regulatory changes affect processing of loans and 
eligibility for the programs.

[[Page 65154]]

Unfunded Mandate Reform Act of 1995

    Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, the 
affected Agencies generally must prepare a written statement, including 
a cost-benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures to State, local, or tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires the affected Agencies 
to identify and consider a reasonable number of regulatory alternatives 
and adopt the least costly, more cost-effective or least burdensome 
alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, and tribal 
governments or the private sector. Thus, today's rule is not subject to 
the requirements of sections 202 and 205 of the UMRA.

Civil Justice Reform

    This final rule has been reviewed under Executive Order 12778, 
Civil Justice Reform. In accordance with this rule: (1) All state and 
local laws and regulations that are in conflict with this rule will be 
preempted; (2) No retroactive effect will be given to this rule; and 
(3) Administrative proceedings in accordance with 7 CFR part 11 must be 
exhausted before bringing suit in court challenging action taken under 
this rule unless those regulations specifically allow bringing suit at 
an earlier time.

Intergovernmental Review

    This action affects the following programs as listed in the Catalog 
of Federal Domestic Assistance:

10.405 Farm Labor Housing Loans and Grants
10.407 Farm Ownership Loans
10.410 Low Income Housing Loans
10.415 Rural Rental Housing Loans
10.420 Rural Self-Help Housing Technical Assistance
10.433 Housing Preservation Grants
10.766 Community Facilities Loans
10.767 Intermediary Relending Program
10.768 Business and Industrial Loans
10.770 Water and Waste Disposal Loans and Grants

    All of the affected programs, except 10.410 Low Income Housing 
Loans, are subject to the provisions of Executive Order 12372 that 
requires intergovernmental consultation with State and local officials.

Background

General

    The affected Agencies make grants, loans, and loan guarantees for 
the planning and performing of construction and other development work 
in rural areas. The Agencies require borrowers and grant recipients to 
meet applicable requirements mandated by Federal statutes, regulations, 
and executive orders to obtain Agency financing. One such requirement 
is compliance with Executive Order 12699, which implements the building 
safety provisions of the Earthquake Hazards Reduction Act of 1977, as 
amended (42 U.S.C. 7701 et seq.).
    Therefore, the Agencies are amending their regulations regarding 
construction and other development for farm credit housing, community 
facilities and business programs to address the requirements of 
Executive Order 12699. This action clarifies the seismic requirements 
applicable to RHS, RBS, RUS, and FSA programs; informs architects, 
engineers and contractors retained by borrowers and grant recipients of 
the seismic safety requirements applicable to new building construction 
projects; and facilitates understanding of and compliance with the 
requirements.

Seismic Introduction

     The Earthquake Hazards Reduction Act of 1977 (the Act), as 
amended, was enacted to reduce risks to life and property from future 
earthquakes in the United States through establishment and maintenance 
of an effective earthquake hazards reduction program. The Act also 
directs the President ``to establish and maintain an effective 
earthquake hazards reduction program'' (the National Earthquake Hazards 
Reduction Program or NEHRP). The Federal Emergency Management Agency 
(FEMA) is the designated agency with primary responsibilities to plan 
and coordinate NEHRP. The objectives of NEHRP include the development 
of technologically and economically feasible design and construction 
methods to make structures earthquake resistant; the development and 
promotion of improved understanding and capability with respect to 
seismic risk; the education of the public as to earthquake phenomena; 
and other areas of seismic research.
    Executive Order 12699 requires that measures to assure seismic 
safety be imposed on federally assisted new building construction to 
the extent permitted by law. The Executive Order requires each Federal 
agency assisting in the financing through Federal grants or loans, or 
guaranteeing the financing through loan or mortgage insurance programs 
of newly constructed buildings to initiate a plan to assure appropriate 
consideration of seismic safety.
    To support the implementation of Executive Order 12699, the 
Interagency Committee on Seismic Safety in Construction (ICSSC), 
composed of members representing Federal agencies involved with 
construction or responsible for governmental assistance for 
construction, recommends the use of seismic codes and standards which 
are substantially equivalent to the ``NEHRP Recommended Provisions for 
the Development of Seismic Regulations for New Buildings.'' This 
guideline that represents the state-of-the-art in seismic design, has 
been widely reviewed, and is currently incorporated into national 
standards and most model codes that can be adopted by state and local 
building codes.

Seismic Design

    Unlike hurricanes, earthquakes cannot be predicted; they strike 
without warning with great destructive forces. Most casualties occur 
when ground shaking causes buildings and other structures to collapse 
and objects to fall upon people. For these reasons, buildings and other 
structures need to be designed to resist earthquake forces.
    Structural performance in earthquakes indicates that severe damage 
to and collapse of buildings almost always are the consequence of 
inadequate design or construction. The successful performance of 
buildings designed and constructed in accordance with seismic standards 
shows that effects of severe earthquakes can be resisted economically.
    In order to reduce hazards from earthquakes, buildings should be 
designed according to appropriate seismic standards and codes. 
Executive Order 12699 requires the use of and conformance to seismic 
standards and codes for all new federally assisted buildings to the 
extent permitted by law. The Federal government has established NEHRP 
to reduce the hazard due to earthquakes and ICSSC to assist Federal 
agencies with earthquake hazard reduction implementation measures. 
ICSSC has identified standards and model building codes that meet the 
requirements of the Executive Order and recommends their use. 
Therefore, the Agencies are requiring that new construction

[[Page 65155]]

financed by programs deriving their statutory from the Consolidated 
Farm and Rural Development Act, 7 U.S.C. 1921, et seq., comply with the 
seismic requirements of these model building codes and recommending 
that the construction and housing under programs authorized by title V 
of the Housing Act of 1949, as amended, 42 U.S.C. 1491, et seq., 
scomply with the seismic requirements of these model building codes.

Discussion of Comments

    A proposed rule was published in the Federal Register (60 FR 44283) 
on August 25, 1995, providing for a 60-day comment period. The rule 
proposed that RHS, RBS, RUS and FSA amend their regulations regarding 
construction and other development in order to meet the implementation 
requirements of Executive Order 12699.
    Interested persons were afforded an opportunity to comment and 
participate in the making of this rule. Due consideration has been 
given to the 5 letters received commenting on the various aspects in 
the proposed rule.
    Three comments suggested that development work be designed and 
constructed in accordance with the seismic requirements of the most 
recently adopted model building code. After review of the May 95 
National Institute of Standards and Technology (NIST) report, 
Comparison of the Seismic Provisions of Model Building Codes and 
Standards to the 1991 NEHRP Recommended Provisions, this regulation 
provides for the use of the most recently adopted model building code 
in the final rule. The following editions of the model codes are 
referenced in the final rule as the baseline or minimum for providing a 
level of seismic safety substantially equivalent to that provided by 
NEHRP Recommended Provisions:

--1991 ICBO Uniform Building Code
--1993 BOCA National Building Code
--1992 SBCCI Standard Building Code

    One comment recommended the Agency recognize the Council of 
American Building Officials (CABO) One and Two Family Dwelling Code 
with amendments for the purpose of compliance with seismic requirements 
in addition to the three model building codes. Comparison of the CABO 
Code with the 1991 NEHRP provisions in the NIST report found that 
conventional light frame dwellings of two stories or 35 feet in height 
maximum, constructed under the 1992 CABO One and Two Family Dwelling 
Code provide the same level of seismic safety as those designed using 
the 1991 NEHRP provisions. However, townhouses where the Av  
0.05 will not meet the level of safety prescribed by the NEHRP 
provisions. Also, dwellings of masonry designed using the CABO One and 
Two Family Dwelling Code will not provide a similar level of seismic 
safety except where Av < 0.05. The CABO seismic requirements for 
townhouses and masonry construction are not comparable to those in the 
NEHRP recommended provisions. Therefore, ICSSC recommendation of model 
codes appropriate for use does not include the CABO code.
    The Agency recognizes that the CABO code is not completely in 
compliance with the NEHRP recommended provisions. However, section 
509(a) of the Housing Act of 1949, 49 U.S.C. 1479(a), requires the 
Secretary to approve a residential building for financing under title V 
of the Housing Act of 1949 if the building is constructed in accordance 
with the standards contained in any of the voluntary national model 
building codes. The Housing Act of 1949 requires the Agency to finance 
decent, safe and sanitary housing, and section 4(b) of the Executive 
Order requires the Agency to amend its regulations to comply with NEHRP 
only ``to the extent permitted by law'' to reduce the hazards from 
earthquakes. The Agency cannot disregard the requirements contained in 
the Housing Act and must continue to finance dwellings constructed in 
accordance with CABO, even though present CABO standards do not comply 
with NEHRP. However, it is important to design buildings according to 
appropriate seismic standards and codes. Therefore, the Agency 
recommends, but cannot require, that all townhouses and masonry 
dwellings financed by the Rural Housing Service housing programs meet 
the seismic requirements of one of the voluntary national model codes 
that provide a level of safety substantially equivalent to that 
intended by the NEHRP recommended provisions. This will ensure that the 
Agency provides decent, safe and sanitary housing for its borrowers and 
meet the intent of the Executive Order.
    The proposed rule contained the Agency's seismic requirements for 
single family housing in exhibit N, of 7 CFR part 1924, subpart A. This 
exhibit has been eliminated from the final rule and the single family 
housing seismic requirements are included in the body of 7 CFR part 
1924, subpart A.
    One comment suggested that regulations should reference the 1994 
NEHRP Maps that delineate by counties geographic areas that are 
affected by the Av threshold criteria. The ICSSC recommendation of 
appropriate codes specifically states that codes which are 
substantially equivalent to the most recent or immediately preceding 
edition of the NEHRP recommended provisions may be considered adequate. 
The Agency used the 1991 NEHRP Maps for the proposed rule. However, for 
the final rule the Agency used the 1994 NEHRP Maps. There is no 
difference in the 1991 and 1994 Av Maps.
    One comment requested a definition of the term ``earthquake 
resistant'' in light of the 1994 NEHRP recommended provisions that 
state ``prevention of damage even in an earthquake event with a 
reasonable probability of occurrence cannot be achieved economically 
for most buildings.'' The point of this statement is that the seismic 
safety provisions of our building codes are intended to prevent 
fatalities; they do not claim to be able to prevent property damage. A 
building constructed to meet modern code requirements is considered a 
success if, after the earthquake, no one has been killed by collapse or 
partial collapse of the building. The building will likely be damaged 
to some extent and may, in some cases, be so badly damaged that it is 
not economically feasible to repair. Therefore, in terms of earthquake 
resistance, the successful performance of buildings designed and 
constructed in accordance with seismic standards shows that the life-
threatening effects of a severe earthquake can be resisted 
economically. The level of earthquake resistance provided by up-to-date 
seismic design codes and practices is intended to protect human life, 
not to prevent damage to the building.
    Finally, one comment suggested that the proposed rule would drive 
up the cost of new construction in the face of dwindling development 
resources and make new construction more difficult to finance. This 
commenter also suggested an alternative, as he stated, ``to dumping 
large sums of both private and public money into housing projects that 
could be shaken into rubble by an earthquake.'' This alternative 
suggestion would promote the development of housing that uses 
alternative building materials that are less expensive to replace and 
more durable than today's building materials. The Agency does not 
believe that this rule will drive up the cost of housing and therefore, 
did not change the final rule nor adopt the suggested alternative as a 
result of this comment.

[[Page 65156]]

List of Subjects

7 CFR Part 1924

    Agriculture, Construction and repair, Construction management, 
Energy conservation, Housing, Loan programs--Agriculture, Low and 
moderate income housing.

7 CFR Part 1942

    Community development, Community facilities, Loan programs--Housing 
and community development, Loan security, Rural areas, Waste treatment 
and disposal--Domestic, Water supply--Domestic.

7 CFR Part 1948

    Business and Industry, Credit, Economic development, Rural areas.

7 CFR Part 1980

    Loan programs--Agriculture, Loan programs--Business and industry--
Rural development assistance, Loan programs--Housing and community 
development, Loan programs--Community programs--Rural development 
assistance.

    Therefore, chapter XVIII, title 7, Code of Federal Regulations is 
amended as follows:

PART 1924--CONSTRUCTION AND REPAIR

    1. The authority citation for part 1924 is revised to read as 
follows:

    Authority: 5 U.S.C. 301; 7 U.S.C 1989; 42 U.S.C 1480.

Subpart A--Planning and Performing Construction And Other 
Development

    2. Section 1924.5 is amended by adding paragraph (d)(4) to read as 
follows:


Sec. 1924.5  Planning development work.

* * * * *
    (d) * * *
    (4) Except as provided in paragraphs (d)(4)(i) through (iii) of 
this section, new building construction and additions shall be designed 
and constructed in accordance with the earthquake (seismic) 
requirements of the applicable Agency's development standard (building 
code). The analysis and design of structural systems and components 
shall be in accordance with applicable requirements of an acceptable 
model building code.
    (i) Agricultural buildings that are not intended for human 
habitation are exempt from these earthquake (seismic) requirements.
    (ii) Single family conventional light wood frame dwellings of two 
stories or 35 feet in height maximum shall be designed and constructed 
in accordance with the 1992 Council of American Building Officials 
(CABO) One and Two Family Dwelling Code or the latest edition.
    (iii) Single family housing of masonry design and townhouses of 
wood frame construction and additions financed (either directly or 
through a guarantee) under title V of the Housing Act of 1949 are 
recommended to be designed and constructed in accordance with the 
earthquake (seismic) requirements of one of the building codes that 
provides an equivalent level of safety to that contained in the latest 
edition of the National Earthquake Hazard Reduction Program's (NEHRP) 
Recommended Provisions for the Development of Seismic Regulations for 
New Building (NEHRP Provisions).
    (iv) Acknowledgment of compliance with the applicable seismic 
safety requirements for new construction will be contained in the 
certification of final plans and specification on the appropriate 
Agency Form.
* * * * *

PART 1942--ASSOCIATIONS

    3. The authority citation for part 1942 is revised to read as 
follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--Community Facility Loans

    4. Section 1942.18 is amended by adding paragraph (d)(17) to read 
as follows:


Sec. 1942.18  Community Facilities--Planning, Bidding, Contracting, 
Constructing.

* * * * *
    (d) * * *
    (17) Seismic safety. (i) All new building construction shall be 
designed and constructed in accordance with the seismic provisions of 
one of the following model building codes or the latest edition of that 
code providing an equivalent level of safety to that contained in 
latest edition of the National Earthquake Hazard Reduction Program's 
(NEHRP) Recommended Provisions for the Development of Seismic 
Regulations for New Building (NEHRP Provisions):
    (A) 1991 International Conference of Building Officials (ICBO) 
Uniform Building Code;
    (B) 1993 Building Officials and Code Administrators International, 
Inc. (BOCA) National Building Code; or
    (C) 1992 Amendments to the Southern Building Code Congress 
International (SBCCI) Standard Building Code.
    (ii) The date, signature, and seal of a registered architect or 
engineer and the identification and date of the model building code on 
the plans and specifications will be evidence of compliance with the 
seismic requirements of the appropriate building code.
* * * * *

PART 1948--RURAL DEVELOPMENT

    5. The authority citation for part 1948 is revised to read as 
follows:

    Authority: 7 U.S.C. 1989.

Subpart C--Intermediary Relending Program (IRP)

    6. Section 1948.117 is amended by adding paragraph (d) to read as 
follows:


Sec. 1948.117  Other regulatory requirements.

* * * * *
    (d) Seismic safety of new building construction. (1) The 
Intermediary Relending Program is subject to the provisions of 
Executive Order 12699 that requires each Federal agency assisting in 
the financing, through Federal grants or loans, or guaranteeing the 
financing, through loan or mortgage insurance programs, of newly 
constructed buildings to assure appropriate consideration of seismic 
safety.
    (2) All new buildings shall be designed and constructed in 
accordance with the seismic provisions of one of the following model 
building codes or the latest edition of that code providing an 
equivalent level of safety to that contained in the latest edition of 
the National Earthquake Hazard Reduction Program's (NEHRP) Recommended 
Provisions for the Development of Seismic Regulations for New Building 
(NEHRP Provisions):
    (i) 1991 International Conference of Building Officials (ICBO) 
Uniform Building Code;
    (ii) 1993 Building Officials and Code Administrators International, 
Inc. (BOCA) National Building Code; or
    (iii) 1992 Amendments to the Southern Building Code Congress 
International (SBCCI) Standard Building Code.
    (3) The date, signature, and seal of a registered architect or 
engineer and the identification and date of the model building code on 
the plans and specifications will be evidence of compliance with the 
seismic requirements of the appropriate building code.

PART 1980--GENERAL

    7. The authority citation for part 1980 is revised to read as 
follows:


[[Page 65157]]


    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 7 U.S.C. 4201 note; 42 
U.S.C. 1480.

Subpart A--General

    8. Section 1980.48 is added to read as follows:


Sec. 1980.48  Seismic safety of new building construction.

    (a) The guaranteed loan programs are subject to the provisions of 
Executive Order 12699 which requires each Federal agency assisting in 
the financing, through Federal grants or loans, or guaranteeing the 
financing, through loan or mortgage insurance programs, of newly 
constructed buildings to assure appropriate consideration of seismic 
safety.
    (b) All new buildings shall be designed and constructed in 
accordance with the seismic provisions of one of the following model 
building codes or the latest edition of that code providing an 
equivalent level of safety to that contained in the latest edition of 
the National Earthquake Hazard Reduction Program's (NEHRP) Recommended 
Provisions for the Development of Seismic Regulations for New Building 
(NEHRP Provisions):
    (1) 1991 International Conference of Building Officials (ICBO) 
Uniform Building Code;
    (2) 1993 Building Officials and Code Administrators International, 
Inc. (BOCA) National Building Code; or
    (3) 1992 Amendments to the Southern Building Code Congress 
International (SBCCI) Standard Building Code.
    (c) The date, signature, and seal of a registered architect or 
engineer and the identification and date of the model building code on 
the plans and specifications will be evidence of compliance with the 
seismic requirements of the appropriate building code.

    Dated: October 21, 1996.
Jill Long Thompson,
Under Secretary, Rural Development.
    Dated: October 15, 1996.
Eugene Moos,
Under Secretary, Farm and Foreign Agricultural Services.
[FR Doc. 96-31426 Filed 12-10-96; 8:45 am]
BILLING CODE 3410-XV-U