[Federal Register Volume 62, Number 226 (Monday, November 24, 1997)]
[Proposed Rules]
[Pages 62527-62538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30341]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 62, No. 226 / Monday, November 24, 1997 / 
Proposed Rules  

[[Page 62527]]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1794

RIN 0572-AB33


Environmental Policies and Procedures

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Utilities Service (RUS) hereby revises its existing 
environmental regulations, Environmental Policies and Procedures, which 
have served as RUS' implementation of the National Environmental Policy 
Act (NEPA) in compliance with the Council on Environmental Quality 
(CEQ) Regulations for Implementing the Procedural Provisions of the 
NEPA. Based on new Congressional mandates, changes in the electric 
industry, and the agency's experience and review of its existing 
procedures, RUS has determined that several changes are necessary for 
its environmental review process to operate in a smooth, efficient, and 
effective manner.

DATES: Public comments must be received by RUS or bear a postmark or 
equivalent, no later than January 23, 1998.

ADDRESSES: Written comments should be sent to Gary J. Morgan, Director, 
Engineering and Environmental Staff, Rural Utilities Service, Stop 
1571, Room 2242, 1400 Independence Ave., SW., Washington, DC 20250-
1571. This proposed rule and the guidance bulletins in this rule will 
be available on the Internet via the RUS home page at www.usda.gov/
rus/.

FOR FURTHER INFORMATION CONTACT: Gary J. Morgan, Director or Lawrence 
R. Wolfe, Senior Environmental Protection Specialist, Engineering and 
Environmental Staff; Rural Utilities Service, Stop 1571, 1400 
Independence Ave., SW., Washington, DC 20250-1571. Telephone (202) 720-
1784. E-mail address ([email protected]) or ([email protected]).

SUPPLEMENTARY INFORMATION:

Classification

    This proposed rule has been determined to be significant and was 
reviewed by the Office of Management and Budget (OMB) under Executive 
Order 12866.

Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. RUS has determined that this proposed rule meets 
the applicable standards provided in Sec. 3. of the Executive Order.

Regulatory Flexibility Act Certification

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), RUS certifies that this proposed rule will not have a 
significant economic impact on a substantial number of small entities. 
If a rule has a significant economic impact on a substantial number of 
small entities, the Regulatory Flexibility Act requires agencies to 
analyze regulatory options that would minimize any significant impact 
of a rule on small entities. The application for financial assistance 
under the RUS electric and telecommunications programs and the 
application for loans and grants under the RUS water and waste program 
are discretionary, regulatory requirements will, therefore, apply only 
to those entities which choose to apply for financial assistance or 
funding.

Information Collection and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Chapter 35, as amended) RUS is requesting comments on the information 
collection incorporated in this proposed rule.
    Comments on this information collection must be received by January 
23, 1998.
    Comments are invited in: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (b) the accuracy of the agency's estimate of the burden of the 
proposed collection of information; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on respondents, 
including through the use of automated collection techniques of other 
forms of information technology.
    For further information contact Lawrence R. Wolfe, Senior 
Environmental Protection Specialist; Engineering and Environment Staff; 
Rural Utilities Service, Stop 1571, 1400 Independence Ave., SW, 
Washington, DC 20250-1571. Telephone: (202) 720-1784. E-mail: 
([email protected]).
    Title: 7 CFR Part 1794, Environmental Policies and Procedures.
    OMB Number: 0572-NEW.
    Type of Request: New collection.
    Abstract: The information collection contained in this rule are 
requirements prescribed by the National Environmental Policy Act of 
1969 (NEPA), as amended (42 U.S.C. 4321-4346), the Council on 
Environmental Quality (CEQ) Regulations for Implementing the Procedural 
Provisions of NEPA (40 CFR parts 1500-1508) and certain related Federal 
environmental laws, statutes, regulations, and Executive Orders.
    The major events which influenced the promulgation of the proposed 
revisions to this rule were the 1994 reorganization of the U.S. 
Department of Agriculture, which transferred the water and waste 
program from the former Farmers Home Administration to RUS, reforms 
within the electric and telecommunications programs, and fundamental 
changes in RUS' implementation of the CEQ regulations.
    The proposed rule will combine all three programs (electric, 
telecommunications, and water and waste) under a single environmental 
regulation and will eliminate unnecessary and burdensome requirements 
previously imposed on applicants seeking financial assistance under the 
three programs. The streamlining of the regulation will allow RUS 
headquarters and field staff to more expeditiously evaluate the 
environmental implications of implementing RUS programs and thus speed 
up the delivery of these programs to qualified applicants.
    RUS applicants would provide environmental documentation, as 
prescribed by the rule, to assure that policy contained in NEPA is 
followed.

[[Page 62528]]

The burden will vary depending on the type, size, and location of each 
project, which would then prescribe the type of information collection 
involved. The collection of information is only that information which 
is essential for RUS to provide environmental safeguards and to comply 
with NEPA as implemented by the CEQ regulations.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 229 hours per response.
    Respondents: Business or other for-profit and non-profit 
institutions.
    Estimated Number of Respondents: 600.
    Estimated Number of Responses per Respondents: 3.
    Estimated Total Annual Burden on Respondents: 415,000 hours.
    Copies of this information collection can be obtained from Dawn 
Wolfgang, Program Support and Regulatory Analysis, Rural Utilities 
Service. Telephone: (202) 720-0812.
    Send comments regarding this information collection requirement to 
the Office of Information and Regulatory Affairs, Office of Management 
and Budget, ATTN: Desk Officer, USDA, Room 10102, New Executive Office 
Building, Washington, DC 20503, and to F. Lamont Heppe, Jr., Director, 
Program Support and Regulatory Analysis, Rural Utilities Service, Stop 
1522, 1400 Independence Ave., SW., Room 4034, Washington, DC 20250-
1522.
    Comments are best assured of having full effect if OMB receives 
them within 30 days of publication in the Federal Register. All 
comments will become a matter of public record.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review to eliminate unnecessary regulations and improve 
those that remain in force.

National Environmental Policy Act Certification

    RUS has determined that this proposed rule will not significantly 
affect the quality of the human environment as defined by the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore, 
this action does not require an environmental impact statement or 
assessment.

Program Affected

    The program described by this proposed rule is listed in the 
Catalog of Federal Domestic Assistance programs under numbers 10.850, 
Rural Electrification Loans and Loan Guarantees, 10.851, Rural 
Telephone Loans and Loan Guarantees, 10.760, Water and Waste Disposal 
System for Rural Communities, 10.764, Resource Conservation Development 
Loans, and 10.765, Watershed Protection and Flood Prevention Loans. 
This catalog is available on a subscription basis from the 
Superintendent of Documents, the U.S. Government Printing Office, 
Washington, DC 20402.

Intergovernmental Review

    This program is subject to the provisions of Executive Order 12372 
that requires intergovernmental consultation with State and local 
officials.

Unfunded Mandate

    This rule contains no Federal mandates (under the regulatory 
provision of Title II of the Unfunded Mandate Reform Act) for State, 
local, and tribal governments of the private sector. Thus today's rule 
is not subject to the requirements of section 202 and 205 of the 
Unfunded Mandate Reform Act.

Background

    On March 13, 1984, the Rural Electrification Administration 
(predecessor of RUS) published 7 CFR part 1794, Environmental Policies 
and Procedures, as a final rule in the Federal Register (49 FR 9544) 
covering the actions of the electric and telecommunications programs. 
Based on new Congressional mandates, changes in the electric industry, 
and the agency's experience and review of its existing procedures, RUS 
has determined that several changes are necessary for its environmental 
review process to operate in a smooth, efficient, and effective manner.
    The existing 7 CFR part 1794 was designed to process proposals from 
RUS' electric and telecommunications programs in addition to the 
agency's internal administrative actions. The Federal Crop Insurance 
Reform and Department of Agriculture Reorganization Act of 1994 (Pub. 
L. 103-354, 108 Stat. 3178), under which RUS became the successor to 
the Rural Electrification Administration, transferred the water and 
waste program from the former Farmers Home Administration (FmHA) to 
RUS. Most changes proposed to 7 CFR part 1794 are the result of the 
addition of the water and waste program to RUS. The environmental 
review requirements of the water and waste program were previously 
contained in 7 CFR part 1940, subpart G. While the environmental review 
of electric and telecommunications proposals is entirely managed from 
the national office, the environmental review of all but major or 
highly controversial water and waste proposals is managed by USDA Rural 
Development staff in state, county, or district offices. To avoid 
confusion, some sections and subsections are further subdivided to 
differentiate among the responsibilities of the three program areas. 
Examples of differences in program responsibilities and requirements 
can be found in Sec. 1794.5, Responsible Officials and Sec. 1794.13, 
Public Involvement.
    Due to the requirements of the existing regulation, RUS has 
sometimes gone through a lengthy environmental review with no 
commensurate benefit to the quality of the human environment. 
Consequently, significant time and resources have been expended by RUS 
and its applicants when early indications strongly suggest that an 
easier and more expeditious procedure would be more prudent. Experience 
has shown that several types of minor RUS applicant proposals involve 
negligible environmental impact. In a number of instances, such 
projects have been delayed as a result of outdated procedures without 
any benefit to the quality of the human environment.
    To foster clarity, readability, and brevity, this proposed rule 
includes changes to the format of the current rule. A list of 
definitions has been added to subpart A. Existing subparts B and C have 
been combined. The order in which proposals are classified in subpart C 
has been arranged from minor to major actions. The arrangement of 
subparts D through G mirrors the order of classification in subpart C. 
Information originally included in subpart J on Supplemental 
Environmental Impact Statements (EIS) has been incorporated into 
proposed subpart G.
    Appendix A, which displays a flow chart of RUS' EIS process would 
be deleted. RUS believes that displaying a flow chart of its EIS 
process as part of this regulation had limited value and there is no 
benefit to include it in the proposed revision.
    For further guidance in the preparation of public notices and 
environmental documents, RUS is preparing a series of guidance 
bulletins. Three program specific bulletins that will be issued 
concurrently with the final rule provide guidance in preparing the 
Environmental Report (ER) for proposed actions classified as 
categorical exclusions and proposed actions which require an 
Environmental Assessment (EA). A fourth bulletin provides applicants 
with guidance in

[[Page 62529]]

the preparation of public notices and public involvement activities. 
Further information on these bulletins is provided in Sec. 1794.8.
    This proposed rule contains a variety of substantive and procedural 
changes from the provisions of the current rule. Some of these 
revisions are minor or merely intended to clarify existing RUS policy 
and procedure, such as Sec. 1794.4 (Trivial Violations) which was 
deleted and Sec. 1794.7 which defines some of the terminology specific 
to the agency. Other revisions reflect fundamental changes in RUS' 
implementation of the CEQ regulations and are outlined below.
    The relationship between RUS and its electric and 
telecommunications applicants has changed substantially since RUS 
issued the final rule in March of 1984. Changes that have occurred in 
the last 4 years have been particularly dramatic. Historically, RUS 
provided substantially all of its applicants' capital needs and 
established a lending relationship reflecting that dominant lending 
role. However, because of limited annual loan authorization levels, RUS 
no longer serves such a role. Moreover, in a 1993 amendment to section 
306E of the Rural Electrification Act of 1936, as amended (7 U.S.C. 
936e), Congress required RUS to abandon its close hands-on control of 
its applicants and instead follow the practices of private market 
lenders. RUS has done so through the development of new forms of loan 
agreements and security instruments and the publication of 7 CFR Part 
1717, subpart M, Operational Controls, which reduce or eliminate much 
of the oversight and control historically exercised by RUS.
    Reflecting these changes and reforms, RUS proposes to revise that 
section of the regulations identifying actions requiring environmental 
review. Environmental reviews will be required in connection with the 
approval of financial assistance for applicants and the issuance of 
rules, regulations, and bulletins by RUS. No reviews will be required 
in connection with approvals provided by RUS pursuant to its loan 
contracts and security instruments with applicants such as approvals of 
lien accommodations or the use of general funds by applicants. These 
approvals are ministerial and are not federal actions subject to 
environmental reviews.
    The existing regulation states that all RUS prepared environmental 
documents will use metric units with non-metric equivalents in 
parentheses and that environmental documents prepared by or for the 
applicant should follow the same format. RUS proposes to reverse that 
format. All RUS prepared environmental documents will use non-metric 
equivalents with one of the following two options: metric units in 
parentheses immediately following the non-metric equivalents or a 
metric conversion table as an appendix. RUS environmental guide 
bulletins will recommend that applicants follow the same format.
    Within subpart C, a classification system defines the level of 
environmental review required for agency and applicant proposed 
actions. Sections 1794.21 through 1794.25 are further subdivided when 
appropriate to differentiate between actions being proposed by RUS and 
actions proposed by electric, telecommunications, and water and waste 
program applicants. The purpose of these additional subsections is to 
aid program applicants in determining the category in which their 
proposed action is classified.
    A number of classification changes are being proposed within 
subpart C. These proposed reclassifications involve minor actions 
proposed by applicants which rarely, if ever, result in significant 
environmental impact or public interest. These changes will streamline 
environmental review of minor actions, and will allow the agency to 
focus its resources on larger projects. RUS believes that the proposed 
changes will provide adequate safeguards to identify any unusual 
circumstances that may require additional agency scrutiny.
    Within Secs. 1794.21(a) and 1794.22(a), RUS proposes to modify the 
thresholds for acreage (facility sites), and capacity (generation 
facilities). Three categories of proposals that previously required RUS 
approval of applicant actions would be deleted, five categories of 
proposals would be downgraded to no longer require an Environmental 
Report (ER), and six new categories of proposals would be added to 
Sec. 1794.21(a). One proposal that previously required an Environmental 
Assessment (EA) and two new categories of proposals would be added to 
Sec. 1794.22(a).
    In addition to modifying the thresholds for acreage and capacity, 
RUS proposes to impose different thresholds for construction of 
electric generating capacity at new sites versus existing sites and to 
add three new categories of proposals within Sec. 1794.23. Proposed 
acreage and capacity threshold changes within Sec. 1794.24, and a 
proposed capacity threshold change within Sec. 1794.25 reflect changes 
that would be made in Secs. 1794.21(a), 1794.22(a), and 1794.23. No 
change is proposed for the existing thresholds for transmission line 
length, however, the existing thresholds for multiple substations 
associated with transmission lines would be eliminated. Capacity 
thresholds would also be eliminated for hydroelectric proposals in 
Secs. 1794.22 and 1794.23. RUS proposed instead to, in most cases, 
adopt the NEPA document prepared by the Federal Energy Regulatory 
Commission, the Federal licensing agency of hydroelectric projects in 
which RUS applicants participate.
    The thresholds for proposed actions in the Water and Waste Program 
as defined in 7 CFR part 1940, subpart G, were reclassified in 
Secs. 1794.21(b) and 1794.22(b). In 7 CFR part 1940, subpart G, EAs are 
classified into two categories, Class I and II; each category 
establishing a level of documentation commensurate with the extent of 
potential environmental impacts. Class I EAs were classified as routine 
minor actions which typically do not justify more extensive 
documentation as are necessary for Class II EAs. The Class I EA 
includes a checklist to document environmental impacts similar to that 
of a categorical exclusion.
    Based on historical experience and a survey of the thresholds 
established by other agencies who administer similar types of water and 
waste programs, RUS is proposing to eliminate the two tiered 
classification for EAs and adopt the more traditional classification 
scheme as outlined in the CEQ regulations. Because RUS co-funds a 
significant portion of its projects with other Federal and State 
agencies, a more traditional classification and documentation scheme is 
thought to be more conducive to minimizing duplicative environmental 
review efforts.
    All current thresholds in 7 CFR part 1940, subpart G were re-
evaluated and would be reclassified based on the following parameters. 
The primary parameter determining thresholds between categorically 
excluded actions and those actions which require the preparation of EAs 
would be the volume of water or wastewater, as defined in terms of 
equivalent residential dwelling units. The proposed regulation would 
require applicants to design categorically excluded proposals to meet 
current needs with a modest growth potential and to serve predominantly 
residential uses either within the existing service area of a system or 
confined to within a one-mile extension beyond current community 
boundaries. The proposed regulation would require that proposed actions 
not meeting the above conditions warrant a more detailed analysis as 
outlined for EAs.

[[Page 62530]]

    In addition, specialized criteria would be established for not 
classifying a proposed action as a categorical exclusion. These 
criteria are consistent conceptually with the U. S. Environmental 
Protection Agency's environmental review requirements in 40 CFR 6.505 
for Title II of the Clean Water Act, Grants for Construction of 
Treatment Works.
    Reviewers that disagree with RUS' proposed classifications and or 
thresholds are encouraged to cite specific experiences that support 
their position on this proposed action.
    RUS proposes to modify its procedures in subparts D through G of 
this part. In Sec. 1794.32, public notice requirements are established 
for proposed actions that impact important land resources (floodplains, 
wetlands, and important farmland). Notice of availability requirements 
in Sec. 1794.42 would be modified for all three program areas. As 
proposed, the EA would be the subject document of the notice, where 
previously, the applicant's ER was the subject document. By this change 
the notice requirements for all three programs would be consistent for 
both EA proposals and EA with scoping proposals. This change will 
encourage more public involvement by allowing public review of EA 
proposals prior to the issuance of a Finding of No Significant Impact 
(FONSI).
    RUS would also change its notice requirements for electric program 
projects requiring scoping. The timing of RUS' Federal Register notice 
for public scoping meetings in Sec. 1794.52 would be reduced from 30 
days to 14 days prior to the meeting. RUS has determined that no 
appreciable benefit has resulted from an earlier notice requirement. 
The existing regulation allows RUS to adopt the applicant's ER as its 
EA but requires RUS to prepare its own EA from the applicant's 
Environmental Impact Assessment (EIA) where a proposed action requires 
scoping. RUS proposes to change this requirement by allowing the EIA to 
serve as its EA provided RUS completes an independent evaluation which 
certifies the accuracy of the document (see Sec. 1794.53) and thus be 
consistent with 40 CFR Sec. 1506.5(a).
    RUS would modify its policy regarding the use of contractor 
prepared EIS's. Under the existing regulation, RUS was required to use 
agency funds when an independent contractor was chosen by RUS to 
prepare the EIS. In accordance with the provisions of 7 CFR part 1789, 
``Use of Consultants Funded by Applicants'' and Section 759A of the 
Federal Agriculture Improvement and Reform Act of 1996, the draft and 
final EIS may be prepared by a consultant selected by RUS and funded by 
the applicant. A new requirement, publication of a notice of 
availability by RUS and the applicant for a Record of Decision would be 
established in Sec. 1794.63. Information on Supplemental EIS's would be 
included in subpart G of this part.
    Any environmental document accepted or prepared by RUS prior to the 
effective date of these regulations should be developed in accordance 
with the RUS' environmental requirements in effect at the time the 
document was accepted or prepared by RUS.

List of Subjects in 7 CFR Part 1794

    Environmental impact statements, Reporting and recordkeeping 
requirements.
    For reasons set forth in the preamble, chapter XVII of title 7 of 
the Code of Federal Regulations is proposed to be amended by revising 
part 1794 to read as follows:

PART 1794--ENVIRONMENTAL POLICIES AND PROCEDURES

Subpart A--General

Sec.
1794.1  Purpose.
1794.2  Authority
1794.3  Actions requiring environmental review.
1794.4  [Reserved].
1794.5  Metric units
1794.6  Responsible officials.
1794.7  Definitions.
1794.8  Guidance.
1794.9  [Reserved]

Subpart B--Implementation of the National Environmental Policy Act

1794.10  Applicant responsibilities.
1794.11  Apply NEPA early in the planning process.
1794.12  Consideration of alternatives
1794.13  Public involvement.
1794.14  Interagency involvement and coordination.
1794.15  Limitations on actions during the NEPA process.
1794.16  Tiering.
1794.17  Mitigation
1794.18--1794.19  [Reserved]

Subpart C--Classification of Proposals

1794.20  Control.
1794.21  Categorically excluded proposals without an ER.
1794.22  Categorically excluded proposals requiring an ER.
1794.23  Proposals normally requiring an EA.
1794.24  Proposals normally requiring an EA with scoping.
1794.25  Proposals normally requiring an EIS.
1794.26-1794.29  [Reserved]

Subpart D--Procedure for Categorical Exclusions

1794.30  General.
1794.31  Classification.
1794.32  Environmental report.
1794.33  Agency action.
1794.34-1794.39  [Reserved]

Subpart E--Procedure for Environmental Assessments

1794.40  General.
1794.41  Document requirements.
1794.42  Notice of availability.
1794.43  Agency finding.
1794.44  Timing of agency action.
1794.45-1794.49  [Reserved]
Subpart F--Procedure for Environmental Assessments With Scoping
1794.50  Normal sequence.
1794.51  Preparation for scoping.
1794.52  Scoping meetings.
1794.53  Environmental impact analysis.
1794.54  Agency determination.
1794.55--1794.59  [Reserved]

Subpart G--Procedure for Environmental Impact Statement

1794.60  Normal sequence.
1794.61  Environmental impact statement.
1794.62  Supplemental EIS.
1794.63  Record of decision.
1794.64  Timing of agency action.
1794.65--1794.69  [Reserved]

Subpart H--Adoption of Environmental Documents

1794.70  General.
1794.71  Adoption of an EA.
1794.72  Adoption of an EIS.
1794.73  Timing of agency action.
1794.74--1794.79  [Reserved]

    Authority: 7 U.S.C. 6941 et seq.; 42 U.S.C. 4321 et seq.; 40 CFR 
parts 1500-1508.

Subpart A--General


Sec. 1794.1  Purpose.

    (a) This part contains the policies and procedures of the Rural 
Utilities Service (RUS) for implementing the requirements of the 
National Environmental Policy Act of 1969 (NEPA), as amended (42 U.S.C. 
4321-4346); the Council on Environmental Quality (CEQ) Regulations for 
Implementing the Procedural Provisions of NEPA (40 CFR parts 1500-1508) 
and certain related Federal environmental laws, statutes, regulations, 
and Executive Orders (E.O.) that apply to RUS' programs and 
administrative actions.
    (b) The policies and procedures contained in this part are intended 
to help RUS officials make decisions that are based on an understanding 
of environmental consequences, and take actions that protect, restore, 
and enhance the environment. In assessing the potential environmental 
impacts of its actions, RUS will consult early with appropriate 
Federal, State, and local

[[Page 62531]]

agencies and other organizations to provide decision-makers with 
information on the issues that are truly significant to the action in 
question.


Sec. 1794.2  Authority.

    (a) This part derives its authority from and is intended to be 
compliant with NEPA, CEQ Regulations for Implementing the Procedural 
Provisions of NEPA, and other RUS regulations.
    (b) Where practicable, RUS will use NEPA analysis and documents and 
review procedures to integrate the requirements of related 
environmental statutes, regulations, and orders.
    (c) This part integrates the requirements of NEPA with other 
planning and environmental review procedures required by law, or by RUS 
practice including but not limited to:
    (1) Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.);
    (2) The National Historic Preservation Act (16 U.S.C. 470 et seq.);
    (3) Farmland Protection Policy Act (7 U.S.C. 4201 et seq.);
    (4) E.O. 11593, Protection and Enhancement of the Cultural 
Environment (3 CFR, 1971 Comp., p. 154);
    (5) E.O. 11514, Protection and Enhancement of Environmental Quality 
(3 CFR, 1970 Comp., p. 104);
    (6) E.O. 11988, Floodplain Management (3 CFR, 1977 Comp., p. 117);
    (7) E.O. 11990, Protection of Wetlands (3 CFR, 1977 Comp., p. 121); 
and
    (8) E.O. 12898, Federal Actions To Address Environmental Justice in 
Minority Populations and Low Income Populations (3 CFR, 1994 Comp., p. 
859).
    (d) Applicants are responsible for ensuring that proposed actions 
are in compliance with all appropriate RUS requirements, environmental 
statutes, regulations, and E.O.s. Bulletins identified in Sec. 1794.8 
contain a list of certain statutes, regulations, and E.Os that may be 
applicable to proposed actions for which RUS financial assistance is 
provided. Environmental documents submitted by the applicant shall be 
prepared under the supervision and guidance of RUS and RUS will 
evaluate and be responsible for the accuracy of all information 
contained therein.


Sec. 1794.3  Actions requiring environmental review.

    The provisions of this part apply to actions by RUS including the 
approval of financial assistance pursuant to the Electric, 
Telecommunications, and Water and Waste Programs, the disposal of 
property held by RUS pursuant to such programs, and the issuance of new 
or revised rules, regulations, and bulletins.


Sec. 1794.4  [Reserved]


Sec. 1794.5  Metric units.

    RUS normally will prepare environmental documents using non-metric 
equivalents with one of the following two options; metric units in 
parentheses immediately following the non-metric equivalents or a 
metric conversion table as an appendix. Environmental documents 
prepared by or for a RUS applicant should follow the same format.


Sec. 1794.6  Responsible officials.

    The Administrator of RUS has the responsibility for Agency 
compliance with all environmental laws, regulations, and E.O.s that 
apply to RUS programs and administrative actions. Responsibility for 
ensuring environmental compliance for actions taken by RUS has been 
delegated as follows:
    (a) Electric and Telecommunications Programs. The appropriate 
Assistant Administrator is responsible for ensuring compliance with 
this part for the respective programs.
    (b) Water and Waste Program. The Assistant Administrator for this 
program is responsible for ensuring compliance with this part at the 
national level. The State Director is the responsible official for 
ensuring compliance with this part for actions taken at the State 
Office level.


Sec. 1794.7  Definitions.

    The following definitions, as well as the definitions contained in 
40 CFR part 1508 of the CEQ regulations, apply to the implementation of 
this part:
    Applicant. The organization applying for financial assistance or 
other approval from either the Electric or Telecommunications Programs 
or the organization applying for a loan or grant from the Water and 
Waste Program.
    Construction Work Plan (CWP). The document required by 7 CFR part 
1710.
    Emergency situation. The repairs made to return the damaged 
facilities of an applicant's system back to service because of a 
natural disaster or system failure that may involve an immediate or 
imminent threat to public health or safety.
    Environmental Impact Analysis (EIA). The document submitted by the 
applicant for proposed actions subject to compliance with Sec. 1794.24 
and under special circumstances Sec. 1794.25.
    Environmental Report (ER). The environmental document and 
documentation normally submitted by applicants for proposed actions 
subject to compliance with Secs. 1794.22 and 1794.23. An ER for the 
Water and Waste Program refers to the environmental review 
documentation normally included as part of the Preliminary Engineering 
Report.
    Environmental review. Any one or all of the levels of environmental 
analysis described under subpart C of this part.
    Equivalent Dwelling Unit (EDU). Level of water or waste service 
provided to a typical rural residential dwelling.
    Important Land Resources. Defined pursuant to the U.S. Department 
of Agriculture's Departmental Regulation 9500-3, Land Use Policy, as 
important farmland, prime forestland, prime rangeland, wetlands, and 
floodplains. Copies of the Departmental Regulation are available from 
USDA, Rural Utilities Service, Washington, DC 20250.
    Loan Design. Document required by 7 CFR part 1737.
    Preliminary Engineering Report (PER). Document required by 7 CFR 
part 1780 for Water and Waste Programs. A PER is prepared by an 
applicant's engineering consultant documenting a proposed action's 
preliminary engineering plan and design and the applicable 
environmental review activities as required in this part. Upon approval 
by RUS, the PER, or a portion thereof, shall serve as the RUS 
environmental document.
    Supervisory control and data acquisition system (SCADA). Electronic 
monitoring and control equipment installed at electric substations and 
switching stations.
    Third-party consultant. A party selected by RUS to prepare the EIS 
for proposed actions listed in Sec. 1794.25 where the applicant 
initiating the proposal agrees to fund preparation of the document in 
accordance with the provisions of 7 CFR Part 1789, ``Use of Consultants 
Funded by Borrowers'' and Section 759A of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 2204b(b)).


Sec. 1794.8  Guidance.

    (a) Electric and Telecommunications Programs. For further guidance 
in the preparation of public notices and environmental documents, RUS 
has prepared a series of program specific guidance bulletins. RUS 
Bulletin 1794A-600 provides guidance in preparing the ER for proposed 
actions classified as categorical exclusions (CEs) (Sec. 1794.22(a)); 
RUS Bulletin 1794A-601 provides guidance in preparing the ER for 
proposed actions which require EAs (Sec. 1794.23(b)); and RUS Bulletin 
1794A-602 provides guidance in the preparation of public notices. 
Copies of

[[Page 62532]]

these bulletins are available upon request by contacting Rural 
Utilities Service, Publications Office, PSRA, Stop 1522; 1400 
Independence Avenue, SW; Washington, D.C. 20250-1522.
    (b) Water and Waste Program. RUS Bulletin 1780-26 provides guidance 
in preparing the PER for proposed actions classified as CEs 
(Sec. 1794.22(b)) and EAs (Sec. 1794.23(c)). A copy of this bulletin is 
available upon request by contacting the appropriate State Director. 
State Directors may provide supplemental guidance to meet State and 
local laws and regulations and to provide for orderly application 
procedures and efficient service to applicants. State Directors shall 
obtain the Administrator's approval for all supplements to RUS Bulletin 
1780-26.


Sec. 1794.9  [Reserved]

Subpart B--Implementation of the National Environmental Policy Act


Sec. 1794.10  Applicant responsibilities.

    As described in subpart C of this part, applicants shall, under 
RUS' direct guidance and supervision, prepare the applicable 
documentation concurrent with a proposed action's engineering, 
planning, and design activities. Documentation shall not be considered 
complete until all public review periods, as applicable, have expired 
and RUS' concurrence, as defined by the appropriate decision document 
and associated public notice, has been issued. This section does not in 
any way relieve RUS or the applicant of the responsibilities for the 
scope, objectivity, and content of the entire environmental document or 
compliance with any policy, regulation, EO, or statute.


Sec. 1794.11  Apply NEPA early in the planning process.

    The environmental review process requires early coordination with 
and involvement of RUS. Applicants should consult with RUS at the 
earliest stages of planning for any proposal that may require an RUS 
action. For proposed actions that normally require an EIS, applicants 
shall consult with RUS prior to obtaining the services of an 
environmental consultant.


Sec. 1794.12  Consideration of alternatives.

    In determining what are reasonable alternatives, RUS considers a 
number of factors. These factors may include, but are not limited to, 
the proposed action's size and scope, state of the technology, economic 
considerations, legal and socioeconomic concerns, availability of 
resources, and the timeframe in which the identified need must be 
fulfilled.


Sec. 1794.13  Public involvement.

    (a) General. In carrying out its responsibilities under NEPA, RUS 
shall make diligent efforts to involve the public in the environmental 
review process through public notices and public hearings and meetings. 
Specific guidance is found in RUS bulletins. See Sec. 1794.8.
    (1) All public notices required by this part shall describe the 
nature, location, and extent of the proposed action and indicate the 
availability and location of additional information. They shall be 
published in newspaper(s) of general circulation within the proposed 
action's area of environmental impact and the county(s) in which the 
proposed action will take place or such other places as RUS determines.
    (2) The number of editions in which the notices should be published 
will be established on a project-by-project basis. Alternative forms of 
notice may also be necessary to ensure that residents located in the 
area affected by the proposed action are notified. The applicant should 
consult with RUS prior to the issuance of notices.
    (3) A copy of all comments received by the applicant concerning 
environmental aspects of the proposed action shall be provided to RUS 
in a timely manner. RUS and applicants shall assess and consider public 
comments both individually and collectively. Responses to public 
comments will be appended to the applicable environmental document.
    (4) RUS and applicants shall make available to the public all 
environmental documents, comments received, errata sheets and 
amendments thereto, public notices, interagency correspondence, and any 
applicable reference material. These materials shall be placed in 
locations convenient for the public as determined by RUS and the 
applicants.
    (5) Public hearings or meetings shall be held at reasonable times 
and locations concerning environmental aspects of a proposed action in 
all cases where, in RUS' opinion, the need for hearings or meetings is 
indicated in order to develop adequate information on the environmental 
implications of the proposed action. Public hearings or meetings will 
be coordinated to the extent practicable with other meetings which may 
be required by RUS. Applicants shall, as necessary, participate in all 
public hearings or meeting.
    (6) Scoping procedures, in accordance with 40 CFR 1501.7, are 
required for proposed actions normally requiring an EA with scoping 
(Sec. 1794.24) or an EIS (Sec. 1794.25). RUS may require scoping 
procedures to be followed for other proposed actions where appropriate 
to achieve the purposes of NEPA.
    (b) Electric and Telecommunication Programs. RUS shall have public 
notices published in the Federal Register and the applicant shall 
concurrently have a similar notice published in a newspaper(s) as 
described in this section. Applicants shall obtain proof of publication 
from the newspaper(s) for inclusion into the applicable environmental 
document.
    (c) Water and Waste Programs. The applicant shall have public 
notices described in this section published in a newspaper(s). 
Applicants shall obtain proof of publication from the newspaper(s) for 
inclusion into the applicable environmental document. Only where the 
proposed actions requires an EIS shall RUS, in addition to applicant 
published notices, publish notice in the Federal Register.


Sec. 1794.14  Interagency involvement and coordination.

    In an attempt to reduce or eliminate duplication of effort with 
State or local procedures, RUS will, to the extent possible and in 
accordance with 40 CFR 1506.2, actively participate with any 
governmental agency to cooperatively or jointly prepare environmental 
documents so that one document will comply with all applicable laws. 
Where RUS has agreed to participate as a cooperating agency, in 
accordance with 40 CFR 1501.6, RUS may rely upon the lead agency's 
procedures for implementing NEPA procedures. In addition, RUS shall 
request that:
    (a) The lead agency indicate that RUS is a cooperating agency in 
all NEPA related notices published for the proposed action;
    (b) The scope and content EA or EIS satisfies the statutory and 
regulatory requirements applicable to RUS; and
    (c) The applicant shall inform RUS in a timely manner of its 
involvement in a proposed action where another Federal agency is 
preparing an environmental document so as to permit RUS to adequately 
fulfill its duties as a cooperating agency.


Sec. 1794.15  Limitations on actions during the NEPA process.

    (a) Until RUS concludes its environmental review process, the 
applicant shall take no action concerning the proposed action which 
would have an adverse environmental impact or limit the choice of 
reasonable alternatives being considered in the environmental review 
process. See 40 CFR 1506.1.
    (b) Electric Program. In determining which applicant activities 
related to a

[[Page 62533]]

proposed action can proceed prior to completion of the environmental 
review process, RUS must determine, among other matters that:
    (1) The activity shall not have an adverse environmental impact and 
shall not preclude the search for other alternatives. For example, 
purchase of water rights, optioning or transfer of land title, or 
continued use of land as historically employed will not have an adverse 
environmental impact. However, site preparation or construction at or 
near the proposed site (e.g. rail spur) or development of a related 
facility (e.g. opening a captive mine) normally will have an adverse 
environmental impact.
    (2) Expenditures are minimal. To be minimal the expenditure must 
not exceed the amount of loss which the applicant could absorb without 
jeopardizing the Government's security interest in the event the 
proposed action is not approved by the Administrator, and must not 
compromise the objectivity of RUS' environmental review. 
Notwithstanding other considerations, expenditures equivalent to up to 
10 percent of the proposed action's cost normally will not compromise 
RUS' objectivity. Expenditures for the purpose of producing 
documentation required for RUS' environmental review are excluded from 
this limitation.


Sec. 1794.16  Tiering.

    It is the policy of RUS to prepare programmatic level analysis in 
order to tier an EIS and an EA where it is practicable, and there will 
be a reduction of delay and paperwork, or where better decision making 
will be fostered. This policy is in compliance with the requirements of 
40 CFR 1502.20.


Sec. 1794.17  Mitigation.

    (a) General. In addition to complying with the requirements of 40 
CFR 1502.14(f), it is RUS policy that a discussion of mitigative 
measures essential to render the impacts of the proposed action not 
significant will be included in or referenced in the Finding of No 
Significant Impact (FONSI) and the Record of Decision (ROD).
    (b) Water and Waste Program. (1) Mitigation measures which involve 
protective measures for environmental resources cited in this part or 
restrictions or limitations on real property located in the service 
areas of the proposed action shall be negotiated with applicants and 
any relevant regulatory agency so as to be enforceable. All mitigation 
measures incorporating land use issues shall recognize the rights and 
responsibilities of landholders in making private land use decisions 
and recognize the responsibility of governments in influencing how land 
may be used to meet public needs.
    (2) Mitigation measures shall be included in the letter of 
conditions.
    (3) RUS has the responsibility for the post approval construction 
or security inspections or monitoring to ensure that all mitigation 
measures included in the environmental documents have been implemented 
as specified in the letter of conditions.


Secs. 1794.18-1794.19  [Reserved]

Subpart C--Classification of Proposals


Sec. 1794.20  Control.

    Electric and Telecommunications Programs. For environmental review 
purposes, RUS has identified and established categories of proposed 
actions (Secs. 1794.21 through 1794.25). An applicant may propose to 
participate with other parties in the ownership of a project where the 
applicant(s) does not have sufficient control to alter the development 
of the project. In such a case, RUS shall determine whether the 
applicant participants have sufficient control and responsibility to 
alter the development of the proposal prior to determining its 
classification. Where the applicant proposes to participate with other 
parties in the ownership of a proposal and all applicants cumulatively 
own:
    (a) Five percent or less of a project, the proposed action will not 
be considered a Federal action subject to this part;
    (b) Thirty three and one-third percent or more of a project, the 
proposed action shall be treated in its usual category;
    (c) More than five percent but less than 33\1/3\ percent of a 
project, RUS shall determine whether the applicant participants have 
sufficient control and responsibility to alter the development of the 
proposal. Consideration shall be given to such factors as:
    (1) Whether construction would be completed regardless of RUS 
financial assistance or approval;
    (2) The stage of planning and construction;
    (3) Total applicant participation;
    (4) Participation percentage of each utility; and
    (5) Managerial arrangements and contractual provisions.


Sec. 1794.21  Categorically excluded proposals without an ER.

    (a) General. Certain types of action taken by RUS do not normally 
require an ER. Proposed actions within this classification are:
    (1) The issuance of bulletins and information publications that do 
not concern environmental matters or substantial facility design, 
construction, or maintenance practices;
    (2) Procurement activities related to the operation of RUS; and
    (3) Personnel and administrative actions.
    (b) Electric and Telecommunications Programs. Applications for 
financial assistance for the types of proposed actions listed below, 
normally do not require the submission of an ER. These types of actions 
are subject to the requirements of Sec. 1794.31. Applicants shall 
sufficiently describe all proposed actions so their proper 
classification can be determined. Detailed description shall be 
provided for those proposed actions so noted. Proposed actions within 
this classification are:
    (1) Purchase of land where use shall remain unchanged, or the 
purchase of existing water rights where no associated construction is 
involved;
    (2) Additional or substitute financial assistance for proposed 
actions which have previously received environmental review and 
approval from the RUS, provided the scope of the proposal and 
environmental considerations have not changed;
    (3) Rehabilitation or reconstruction of transportation facilities 
within existing rights-of-way (ROW) or generating facility sites where 
there is no substantial increase in use. A description of the 
rehabilitation or reconstruction shall be provided to RUS;
    (4) Changes or additions to microwave sites, substations, switching 
stations, telecommunications switching or multiplexing centers, 
buildings, or small structures requiring new physical disturbance or 
fencing of less than one acre (0.4 hectare). A description of the 
additions or changes and the area to be impacted by the expansion shall 
be provided to RUS;
    (5) Internal modifications or equipment additions (e.g., computer 
facilities, relocating interior walls) to structures or buildings;
    (6) Internal or minor external changes to electric generating or 
fuel processing facilities and related support structures where there 
is negligible impact on the outside environment. A description of the 
changes shall be provided to RUS;
    (7) Ordinary maintenance or replacement of equipment or small 
structures (e.g., line support structures, line transformers, microwave 
facilities, telecommunications remote switching and multiplexing 
sites);

[[Page 62534]]

    (8) The construction of telecommunications facilities within the 
fenced area of an existing substation, switching station, or within the 
boundaries of an existing electric generating facility site;
    (9) SCADA and energy management systems involving no new external 
construction;
    (10) Testing or monitoring work (e.g., soil or rock core sampling, 
monitoring wells, air monitoring;
    (11) Studies and engineering undertaken to define proposed actions 
or alternatives sufficiently so that environmental effects can be 
assessed;
    (12) Construction of electric power lines within the fenced area of 
an existing substation, switching station, or within the boundaries of 
an electric generating facility site. A description of the facilities 
to be constructed shall be provided to RUS;
    (13) Contracts for certain items of equipment which are part of a 
proposed action for which RUS is preparing an EA or EIS, and which meet 
the limitations on actions during the NEPA process as established in 40 
CFR 1506.1(d) and contained in Sec. 1794.17 (e.g., long lead time items 
such as turbines, boilers, or substation transformers);
    (14) Rebuilding of power lines or telecommunications cables where 
road or highway reconstruction requires the applicant to relocate the 
lines either within or adjacent to the new road or highway easement or 
right-of-way. A description of the facilities to be constructed shall 
be provided to RUS;
    (15) Phase or voltage conversions, reconductoring or upgrading of 
existing electric distribution lines, or telecommunication facilities. 
A description of the facilities to be constructed shall be provided to 
RUS;
    (16) Construction of new power lines, substations, or 
telecommunications facilities on previously disturbed industrial or 
commercial, where the applicant has no control over the location of the 
new facilities. Related off-site facilities would be treated in their 
normal category. A description of the facilities to be constructed 
shall be provided to RUS;
    (17) Participation by an applicant(s) in any proposed action where 
total applicant financial participation will be five percent or less;
    (18) Purchase of existing facilities or a portion thereof where use 
or operation will remain unchanged and which presently are in 
compliance with environmental laws and regulations. A description of 
the facilities to be purchased along with a certification from the 
utility owner that the facilities are in compliance with applicable 
environmental laws and regulations shall be provided to RUS;
    (19) Additional bulk commodity storage (e.g., coal, fuel oil, 
limestone) within existing generating station boundaries. A 
certification attesting to the current state of compliance of the 
existing facilities and a description of the facilities to be added 
shall be provided to RUS;
    (20) Proposals designed to reduce the amount of pollutants released 
into the environment (e.g., precipitators, baghouse or scrubber 
installations, coal washing equipment) which will have no other 
environmental impact outside the existing facility site. A description 
of the facilities to be constructed shall be provided to RUS;
    (21) Construction of standby diesel electric generators one 
megawatt or less and associated facilities, for the primary purpose of 
providing emergency power, at an existing applicant headquarters or 
district office, telecommunications switching or multiplexing site, or 
an industrial facility served by the applicant. A description of the 
facilities to be constructed shall be provided to RUS;
    (22) Construction of onsite facilities designed for the transfer of 
ash, scrubber wastes, and other byproducts from coal-fired electric 
generating stations for recycling or storage at an existing coal mine 
(surface or underground). A description of the facilities to be 
constructed shall be provided to RUS;
    (23) Changes or additions to an existing water well system, 
including new water supply wells and associated pipelines within the 
boundaries of an existing well field or generating station site. A 
description of the changes or additions shall be provided; and
    (24) Repowering or uprating of an existing unit(s) at a fossil-
fueled generating station that does not include the substitution of one 
fuel combustion technology with another.
    (c) Water and Waste Program. Applications for financial assistance 
for certain proposed actions do not normally require the submission of 
an ER. These types of actions are subject to the classification 
requirements of Sec. 1794.31. Proposed actions within this 
classification are:
    (1) Management actions relating to invitation for bids, contract 
award, and the actual physical commencement of construction activities;
    (2) Proposed actions that primarily involve the purchase and 
installation of office equipment or motorized vehicles;
    (3) The award of financial assistance for technical assistance, 
planning purposes, environmental analysis, management studies, or 
feasibility studies; and
    (4) Loan closing and service activities that do not alter the 
purpose, operation, location, or design of the proposal as originally 
approved, such as subordinations, and amendments and revisions to 
approved actions, and the provision of additional financial assistance 
for cost overruns.


Sec. 1794.22  Categorically excluded proposals requiring an ER.

    (a) Electric and Telecommunications Programs. Applications for 
financial assistance for the types of proposed actions listed herein 
normally require the submission of an ER and are subject to the 
requirements of Sec. 1794.32. In order to provide for extraordinary 
circumstances, RUS may require development of an ER for proposals 
listed in Sec. 1794.21(b). Proposed actions within this classification 
are:
    (1) Construction of electric power lines and associated facilities 
designed for or capable of operation at a nominal voltage of either:
    (i) Less that 69 kilovolts (kV);
    (ii) Less than 230 kV if no more than 25 miles (40.2 kilometers) of 
line are involved; or
    (iii) 230 kV or greater involving no more than three miles (4.8 
kilometers) of line;
    (2) Construction of buried and aerial telecommunications lines, 
cables, and related facilities;
    (3) Construction of microwave facilities, SCADA, and energy 
management systems involving no more than five acres (2 hectares) of 
physical disturbance at any single site;
    (4) Construction of cooperative or company headquarters, 
maintenance facilities, or other buildings involving no more than 10 
acres (4 hectares) of physical disturbance or fenced property;
    (5) Changes to existing transmission lines that involve less than 
20 percent pole replacement, or the complete rebuilding of existing 
distribution lines within the same right-of-way (ROW). Changes to 
existing transmission lines that require 20 percent or greater pole 
replacement will be considered the same as new construction;
    (6) Changes or additions to existing substations, switching 
stations, telecommunications switching or multiplexing centers, or 
external changes to buildings or small structures requiring one acre 
(0.4 hectare) or more but no more than five acres (2 hectares) of new 
physically disturbed land or fenced property;
    (7) Construction of substations, switching stations, or 
telecommunications switching or

[[Page 62535]]

multiplexing centers requiring no more than five acres (2 hectares) of 
new physically disturbed land or fenced property;
    (8) Construction of diesel electric generating facilities of five 
megawatts (MW) (nameplate rating) or less either at an existing 
generation or substation site. This category also applies to a diesel 
electric generating facility of five MW or less that is located at or 
adjacent to an existing landfill site and supplied with refuse derived 
fuel. All new associated facilities and related electric power lines 
shall be covered in the ER;
    (9) Additions to or the replacement of existing generating units at 
a hydroelectric facility or dam which will result in no change in the 
normal maximum surface area or normal maximum surface elevation of the 
existing impoundment. All new associated facilities and related 
electric power lines shall be covered in the ER;
    (10) Construction of a battery energy storage system at an existing 
generating station or substation site;
    (11) Proposals designed or associated with facilities that will 
reduce the amount of pollutants released into the environment which 
will not have significant environmental impacts outside of the existing 
facility site; and
    (12) Construction of new water supply wells and associated 
pipelines not located within the boundaries of an existing well field 
or generating station site.
    (b) Water and Waste Program. For certain proposed actions, 
applications for financial assistance normally require the submittal of 
an ER as part of the PER. These types of actions are subject to the 
requirements of Sec. 1794.32. Proposed actions within this 
classification are:
    (1) Rehabilitation of existing facilities, functional replacement 
or rehabilitation of equipment, or the construction of new ancillary 
facilities adjacent or appurtenant to existing facilities, including 
but not limited to, replacement of utilities such as water or sewer 
lines and appurtenances for existing users with modest or moderate 
growth potential, reconstruction of curbs and sidewalks, street 
repaving, and building modifications, renovations, and improvements;
    (2) Facility improvements to meet current needs with a modest 
change in use, size, capacity, purpose or location from the original 
facility. The proposed action must be designed for predominantly 
residential use with other new or expanded users being small-scale, 
commercial enterprises having limited secondary impacts;
    (3) Construction of new facilities that are designed to serve 
populations less than 500 EDU in size with modest growth potential. The 
proposed action must be designed for predominantly residential use with 
other new or expanded users being small-scale, commercial enterprises 
having limited secondary impacts and must be located within the 
existing service area of the facility;
    (4) The extension, enlargement or construction of interceptors, 
collection, transmission or distribution lines within a one-mile (1.6 
kilometer) limit from existing service areas estimated from any 
boundary listed as follows:
    (i) The corporate limits of the community being served;
    (ii) If there are developed areas immediately contiguous to the 
corporate limits of a community, the limits of these developed areas; 
or
    (iii) If an unincorporated area is to be served, the limits of the 
developed areas;
    (5) Actions described in Sec. 1794.21(c)(4) which alter the 
purpose, operation, location, or design of the proposed action as 
originally approved;
    (6) Installation of new water supply wells or water storage 
facilities that are required by a regulatory authority or standard 
engineering practice as a backup to existing production well(s) or as 
reserve for fire protection; and
    (7) The lease or disposal of real property by RUS which may result 
in a change in use of the real property in the reasonably foreseeable 
future and such change is equivalent in magnitude or type as described 
above.
    (c) Specialized criteria for not granting a CE for Water and Waste 
Projects. An EA must be prepared if a proposed action normally 
classified as a CE meets any of the following:
    (1) The facilities to be provided will either create a new or 
relocate an existing discharge to surface or ground waters;
    (2) The facilities will result in substantial increases in the 
volume of discharge or the loading of pollutants from an existing 
source or from new facilities to receiving waters; or
    (3) The facilities would provide capacity to serve a population 
greater than 500 EDUs or a 30 percent increase in the existing 
population whichever is larger.


Sec. 1794.23  Proposals normally requiring an EA.

    RUS will normally prepare an EA for all proposed actions which are 
neither categorical exclusions (Secs. 1794.21 and 1794.22) nor normally 
requiring an EIS (Sec. 1794.25). For certain actions within this class, 
scoping and document procedures contained in Secs. 1794.50 through 
1794.54 shall be followed (see Sec. 1794.24). The following are 
proposed actions which normally require an EA and shall be subject to 
the requirements of Secs. 1794.40 through 1794.44.
    (a) General. Issuance or modification of RUS regulations concerning 
environmental matters.
    (b) Telecommunications and Water and Waste Programs. An EA shall be 
prepared for applications for financial assistance for all proposed 
actions not specifically defined as a CE or otherwise specifically 
categorized by the Administrator on a case-by-case basis.
    (c) Electric Program. Applications for financial assistance for 
certain proposed actions normally require the preparation of an EA. 
Proposed actions falling within this classification are:
    (1) Construction of combustion turbine or diesel generating 
facilities of 50 MW (nameplate rating) or less at a new site (no 
existing generating capacity) except for items covered by 
Sec. 1794.22(a)(8). All new associated facilities and related electric 
power lines shall be covered in the EA;
    (2) Construction of combustion turbine or diesel generating 
facilities of 100 MW (nameplate rating) or less at an existing 
generating site, except for items covered by Sec. 1794.22(a)(8). All 
new associated facilities and related electric power lines shall be 
covered in the EA;
    (3) Construction of any other type of new electric generating 
facilities of 10 MW (nameplate rating) or less. All new associated 
facilities and related electric power lines shall be covered in the EA;
    (4) Repowering or uprating of an existing unit(s) at a fossil-
fueled generating station where the existing fuel combustion technology 
of the affected unit(s) is substituted for another (e.g., coal or oil-
fired boiler is converted to a fluidized bed boiler or replaced with a 
combustion turbine unit);
    (5) Installation of new generating units at an existing 
hydroelectric facility or dam, or the replacement of existing 
generating units at a hydroelectric facility or dam which will result 
in a change in the normal maximum surface area or normal maximum 
surface elevation of the existing impoundment. All new associated 
facilities and related electric power lines shall be covered in the EA;
    (6) A new drilling operation or the expansion of a mining or 
drilling operation;
    (7) Purchase of existing facilities or a portion thereof which are 
presently in violation of Federal, State, or local environmental laws 
or regulations;

[[Page 62536]]

    (8) Construction of cooperative headquarters, maintenance, and 
equipment storage facilities involving more than 10 acres (4 hectares) 
of physical disturbance or fenced property;
    (9) The construction of electric power lines and related facilities 
designed for and capable of operation at a nominal voltage of 230 kV or 
more involving more than three miles (4.8 kilometers) but not more than 
25 miles (40 kilometers) of line;
    (10) The construction of electric power lines and related 
facilities designed for or capable of operation at a nominal voltage of 
69 kV or more but less than 230 kV where more than 25 miles (40 
kilometers) of power line are involved;
    (11) The construction of substations or switching stations 
requiring greater than five acres (2 hectares) but not more than 10 
acres (4 hectares) of new physical disturbance at a single site; and
    (12) Construction of facilities designed for the transfer and 
storage of ash, scrubber wastes, and other byproducts from coal-fired 
electric generating stations that will be located beyond the existing 
facility site boundaries.


Sec. 1794.24  Proposals normally requiring an EA with scoping.

    (a) Electric Program. Applications for financial assistance for 
certain proposed actions require the use of a scoping procedure in the 
development of the EA. These types of actions are subject to the 
requirements of Secs. 1794.50--1794.54. Proposed actions falling within 
this classification are:
    (1) The construction of electric power lines and related facilities 
designed for and capable of operation at a nominal voltage of 230 kV or 
more where more than 25 miles (40 kilometers) of power line are 
involved;
    (2) The construction of substations and switching stations require 
new physical disturbance or fencing of more than 10 acres (4 hectares) 
at any one site; and
    (3) Construction of combustion turbines and diesel generators of 
more than 50 MW at a new site or more than 100 MW at an existing site; 
and the construction of any other type of electric generating facility 
of more than 10 MW but not more than 50 MW (nameplate rating). All new 
associated facilities and related electric power lines shall be covered 
in any EA or EIS that is prepared.
    (b) Telecommunications and Water and Waste Programs. There are no 
actions normally falling within this classification.


Sec. 1794.25  Proposals normally requiring an EIS.

    Applications for financial assistance for certain proposed actions 
that may significantly affect the quality of the human environment 
shall require the preparation of an EIS.
    (a) Electric Program. An EIS will normally be required in 
connection with proposed actions involving the following types of 
facilities:
    (1) New electric generating facilities of more than 50 MW 
(nameplate rating) other than diesel generators or combustion turbines. 
All new associated facilities and related electric power lines shall be 
covered in the EIS; and
    (2) A new mining operation when the applicants have effective 
control (e.g., dedicated mine or purchase of a substantial portion of 
the mining equipment).
    (b) Proposals listed above are subject to the requirements of 
Secs. 1794.60, 1794.61, 1794.63, and 1794.64. Preparation of a 
supplemental draft or final EIS in accordance with 40 CFR 1502.9 shall 
be subject to the requirements of Secs. 1794.62 and 1794.64.
    (c) Telecommunications and Water and Waste Programs. No groups or 
sets of proposed actions normally require the preparation of an EIS. 
The environmental review process, as described in this part, shall be 
used to identify those proposed actions for which the preparation of an 
EIS is necessary. If an EIS is required, RUS shall proceed directly to 
its preparation. Prior completion of an EA is not mandatory.


Secs. 1794.26-1794.29  [Reserved]

Subpart D--Procedure for Categorical Exclusions


Sec. 1794.30  General.

    The procedures of this subpart which apply to proposed actions 
classified as CE's in Secs. 1794.21 and 1794.22 provide RUS with 
information necessary to determine if the proposed action meets the 
criteria for a CE. Where, because of extraordinary circumstances, a 
proposed action may have a significant effect on the quality of the 
human environment, RUS may require additional environmental 
documentation.


Sec. 1794.31  Classification.

    (a) Electric and Telecommunications Programs. RUS will normally 
determine the proper environmental classification of projects based on 
its evaluation of the project description set forth in the construction 
work plan or loan design which the applicant is required to submit with 
its application for financial assistance. Each project must be 
sufficiently described to ensure its proper classification. RUS may 
require the applicant to develop detailed descriptions where 
appropriate.
    (b) Water and Waste Program. RUS will normally determine the proper 
environmental classification for projects based on its evaluation of 
the preliminary planning and design information. This information is 
developed by the applicant under the guidance and supervision of the 
State Environmental Coordinator.


Sec. 1794.32  Environmental report.

    (a) For proposed actions listed in Secs. 1794.21(a) and 1794.21(b), 
the applicant is normally not required to submit an ER.
    (b) For proposed actions listed in Secs. 1794.22(a) and 1794.22(b), 
the applicant shall normally submit an ER or its equivalent. The 
applicant may be required to publish public notices and provide 
evidence of such with its ER if the proposed action is located in, 
impacts on, or converts important land resources.


Sec. 1794.33  Agency action.

    RUS may act on an application for financial assistance upon 
determining, based on the review of documents as set forth above and 
such additional information as RUS deems necessary, that the project is 
categorically excluded.


Secs. 1794.34-1794.39  [Reserved]

Subpart E--Procedure for Environmental Assessments


Sec. 1794.40  General.

    This subpart applies to proposed actions described in Sec. 1794.23. 
Where appropriate to carry out the purposes of NEPA, RUS may impose, on 
a case-by-case basis, additional requirements associated with the 
preparation of an EA. If at any point in the preparation of an EA, RUS 
determines that the proposed action will have a significant impact on 
the environment, the preparation of an EIS shall be required and the 
procedures in subpart G of this part shall be followed.


Sec. 1794.41  Document requirements.

    Applicants will provide an ER in accordance with the appropriate 
guidance documents referenced in Sec. 1794.8. After RUS has evaluated 
the ER and has determined the ER adequately addresses all applicable 
environmental issues, the ER will normally serve as RUS' EA. RUS will 
take responsibility for the scope and content of an EA.

[[Page 62537]]

Sec. 1794.42  Notice of availability.

    (a) Prior to RUS making a finding in accordance with Sec. 1794.43 
and upon RUS' authorization and guidance, the applicant shall have a 
notice published which announces the availability of the EA and 
solicits public comments on the EA.
    (b) Electric and Telecommunications Programs. RUS shall have a 
notice published in the Federal Register which announces the 
availability of the EA and solicits public comments on the EA.


Sec. 1794.43  Agency finding.

    (a) If RUS finds, based on an EA that the proposed action will not 
have a significant impact on the human environment, RUS will prepare a 
FONSI. Upon authorization of RUS, the applicant shall have a notice 
published which informs the public of the RUS' finding and the 
availability of the EA and FONSI. The notice shall be prepared and 
published in accordance with RUS guidance.
    (b) Electric and Telecommunications Programs. RUS shall have a 
notice published in the Federal Register that announces the 
availability of the EA and FONSI.


Sec. 1794.44  Timing of agency action.

    RUS may take its final action on proposed actions requiring an EA 
(Sec. 1794.23) at any time after publication of the RUS and applicant 
notices that a FONSI has been made.


Secs. 1794.45-1794.49  [Reserved]

Subpart F--Procedure for Environmental Assessments With Scoping


Sec. 1794.50  Normal sequence.

    For proposed actions covered by Sec. 1794.24 and other actions 
determined by the Administrator to require an EA with Scoping, RUS and 
the applicant will follow the same procedures for scoping and the 
requirements for notices and documents as for proposed actions normally 
requiring an EIS through the point at which the Environmental Impact 
Assessment (EIA) is submitted (see Sec. 1794.54). After the EIA has 
been submitted, RUS will make a judgment to utilize the EIA as its EA 
and issue a FONSI or prepare an EIS.


Sec. 1794.51  Preparation for scoping.

    (a) As soon as practicable after RUS and the applicant have 
developed a schedule for the environmental review process, RUS will 
have its notice of intent to prepare an EA or EIS published in the 
Federal Register (see 40 CFR 1508.22). The applicant shall have 
published, in a timely manner, a notice similar to RUS' notice.
    (b) As part of the early planning, the applicant should consult 
with appropriate Federal, State, and local agencies to inform them of 
the proposed action, identify permits and approvals which must be 
obtained, and administrative procedures which must be followed.
    (c) Before formal scoping is initiated, RUS will require the 
applicant to submit an Alternative Evaluation Study and either a Siting 
Study (generation) or a Macro-Corridor Study (transmission lines).
    (d) The applicant is encouraged to hold public information meetings 
in the general location of the proposed action and any reasonable 
alternatives when such applicant meetings will make the scoping process 
more meaningful. A written summary of the comments made at such 
meetings must be submitted to RUS as soon as practicable after the 
meetings.


Sec. 1794.52  Scoping meetings.

    (a) Both RUS and the applicant shall have a notice published which 
announces a public scoping meeting is to be conducted, either in 
conjunction with the notice of intent or as a separate notice.
    (b) The RUS notice shall be published in the Federal Register at 
least 14 days prior to the meeting(s). The applicant's notice shall be 
published in a newspaper at least 10 days prior to the meeting(s). 
Other forms of media may also be used by the applicant to notice the 
meetings.
    (c) Where an environmental document is the subject of the hearing 
or meeting, that document will be made available to the public at least 
10 days in advance of the meeting.
    (d) The scoping meeting(s) will be held in the area of the proposed 
action at such places as RUS determines will best afford an opportunity 
for public involvement. Any person or representative of an 
organization, or government body desiring to make a statement at the 
meeting may make such statement in writing or orally. The format of the 
meeting may be one of two styles. It can either be of the traditional 
style which features formal presentations followed by a comment period, 
or the open house style in which attendees are able to individually 
obtain information on topics or issues of interest within an 
established time period. A transcript will be made of the scoping 
meeting.
    (e) As soon as practicable after the scoping meeting(s), RUS, as 
lead agency, shall determine the significant issues to be analyzed in 
depth and identify and eliminate from detailed study the issues which 
are not significant or which have been covered by prior environmental 
review. RUS will develop a proposed scope for further environmental 
study and review. RUS will send a copy of this proposed scope to 
cooperating agencies and the applicant, and allow recipients 30 days to 
comment on the scope's adequacy and emphasis. After expiration of the 
30 day period, RUS shall provide written guidance to the applicant 
concerning the scope of environmental study to be performed and 
information to be gathered.


Sec. 1794.53  Environmental impact analysis.

    (a) After scoping procedures have been completed, RUS will require 
the applicant to develop and submit an EIA. The EIA shall be prepared 
under the supervision and guidance of the RUS staff and RUS will 
evaluate and be responsible for the accuracy of all information 
contained therein.
    (b) The EIA will normally serve as the RUS EA. The EIA can also 
serve as the basis for an EIS, and under such circumstances will be 
made an appendix to the EIS. After RUS has reviewed and found the EIA 
to be satisfactory, the applicant shall provide RUS with a sufficient 
number of copies of the EIA to satisfy RUS' distribution plan.
    (c) The EIA shall include a summary of the construction and 
operation monitoring and mitigation measures for the proposed action. 
These measures may be revised as appropriate in response to comments 
and other information. and shall be incorporated by summary or 
reference into the FONSI or ROD.


Sec. 1794.54  Agency determination.

    Following the scoping process and the development of a satisfactory 
EA, RUS shall make a judgment as to whether or not the proposed action 
is a major Federal action significantly affecting the quality of the 
human environment. If a significant effect is evident, RUS will 
continue with the procedures in subpart G of this part. If a 
significant effect is not evident, RUS will proceed in accordance with 
Secs. 1794.42 through 1794.44.


Secs. 1794.55-1794.59  [Reserved]

Subpart G--Procedure for Environmental Impact Statements


Sec. 1794.60  Normal sequence.

    For proposed actions requiring an EIS (see Sec. 1794.25), the NEPA 
process shall proceed in the same manner as for proposed actions 
requiring an EA with

[[Page 62538]]

scoping through the point at which the scoping process is completed 
(see Sec. 1794.52).


Sec. 1794.61  Environmental impact statement.

    (a) General. An EIS shall be prepared in accordance with 40 CFR 
part 1502. The draft and final EIS may be prepared by a third-party 
consultant selected by RUS and funded by the applicant.
    (1) After a draft or final EIS has been prepared, RUS and the 
applicant shall concurrently have a notice of availability for the 
document published. The time period allowed for review will be a 
minimum of 45 days for a draft EIS and 30 days for a final EIS. This 
period is measured from the date that the U.S. Environmental Protection 
Agency (EPA) publishes a notice in the Federal Register in accordance 
with 40 CFR 1506.10.
    (2) In addition to circulation required by 40 CFR 1502.19, the 
draft and final EIS (or summaries thereof, at RUS' discretion) shall be 
circulated to the appropriate state, regional, and metropolitan 
clearinghouses.
    (3) Where a final EIS does not require substantial changes from the 
draft EIS, RUS may document required changes through errata sheets, 
insertion pages, and revised sections to be incorporated into the draft 
EIS. In such cases, RUS shall circulate such changes together with 
comments on the draft EIS, responses to comments, and other appropriate 
information as its final EIS. RUS will not circulate the draft EIS 
again, although the draft EIS will be provided if requested within 30 
days of publication of notice of availability of the final EIS.
    (b) Electric Program. Where an EIA has been prepared by the 
applicant or its consultant, RUS will develop its draft and final EIS 
from the EIA. An EIA will not be required if the draft and final EIS is 
prepared by a third-party consultant.


Sec. 1794.62  Supplemental EIS.

    (a) A supplement to a draft or final EIS shall be prepared, 
circulated, and given notice by RUS and the applicant in the same 
manner (exclusive of scoping) as a draft and final EIS (see 
Sec. 1794.61).
    (b) Normally RUS and the applicant will have published notices of 
intent to prepare a supplement to a final EIS in those cases where a 
ROD has already been issued.
    (c) RUS, at its discretion, may issue an information supplement to 
a final EIS where RUS determines that the purposes of NEPA are 
furthered by doing so even though such supplement is not required by 40 
CFR 1502.9(c)(1). RUS and the applicant shall concurrently have a 
notice of availability published. The notice requirements shall be the 
same as for a final EIS and the information supplement shall be 
circulated in the same manner as a final EIS. RUS shall take no final 
action on any proposed modification discussed in the information 
supplement until 30 days after the RUS notice of availability or the 
applicant's notice is published, whichever occurs later.


Sec. 1794.63  Record of decision.

    (a) Upon completion of the review period for a final EIS, RUS will 
have its ROD published in accordance with 40 CFR 1505.2 and 1506.10.
    (b) Separate RUS and applicant notices shall be published 
concurrently. The notices shall summarize the RUS decision and announce 
the availability of the ROD. Copies of the ROD will be made available 
upon request from the point of contact identified in the notice.


Sec. 1794.64  Timing of agency action.

    (a) RUS may take its final action or execute commitments on 
proposed actions requiring an EIS or Supplemental EIS at any time after 
the ROD has been published.
    (b) For budgetary purposes some financial assistance may be 
approved conditionally with a stipulation that no funds shall be 
advanced until a ROD has been prepared .


Secs. 1794.65-1794.69  [Reserved]

Subpart H--Adoption of Environmental Documents.


Sec. 1794.70  General.

    This subpart covers the adoption of environmental documents 
prepared by other Federal agencies. Where applicants participate in 
proposed actions for which an EA or EIS has been prepared by or for 
another Federal agency, RUS may adopt the existing EA or EIS in 
accordance with 40 CFR 1506.3.


Sec. 1794.71  Adoption of an EA.

    RUS may adopt a Federal EA or EIS or a portion thereof as its EA. 
RUS shall make the EA available and assure that notice is provided in 
the same manner as if RUS had prepared the EA.


Sec. 1794.72  Adoption of an EIS.

    (a) Where RUS determines that an existing Federal EIS requires 
additional information to meet the standards for an adequate statement 
for RUS' proposed action, RUS may adopt all or a portion of the EIS as 
a part of its draft EIS. The circulation and notice provisions for a 
draft and final EIS (see Sec. 1794.61) apply.
    (b) If RUS was not a cooperating agency but determines that another 
Federal agency's EIS is adequate, RUS shall adopt the EIS as its final 
EIS. RUS and the applicant shall have separate notices published 
advising of RUS' adoption of the EIS and independent determination of 
its adequacy.
    (c) If the adopted EIS is generally available and meets the 
Agency's standards, RUS shall have a public notice published informing 
the public of its action and availability of the EIS to interested 
parties upon request. If the adopted EIS is not generally available, 
RUS shall have a public notice published as above and will circulate 
copies in accordance with 40 CFR 1502.19 and 1506.3.


Sec. 1794.73  Timing of agency action.

    Where RUS has adopted another agency's environmental documents, the 
timing of the action shall be subject to the same requirements as if 
RUS had prepared the required EA or EIS.


Secs. 1794.74-1794.79  [Reserved]

    Dated: November 12, 1997.
Inga Smulkstys,
Deputy Under Secretary, Rural Development.
[FR Doc. 97-30341 Filed 11-21-97; 8:45 am]
BILLING CODE 3410-15-P