[Federal Register Volume 79, Number 23 (Tuesday, February 4, 2014)]
[Proposed Rules]
[Pages 6740-6794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-00220]



[[Page 6739]]

Vol. 79

Tuesday,

No. 23

February 4, 2014

Part III





Department of Agriculture





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Rural Utilities Service





7 CFR Parts 1703, 1709, et al.





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Rural Business-Cooperative Service





Rural Housing Service





Rural Utilities Service





Farm Service Agency

7 CFR Parts 1924, 1940, et al.





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Rural Housing Service

7 CFR Parts 3550, 3560, et al.





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Rural Business-Cooperative Service





Rural Utilities Service

7 CFR Parts 4274, 4279, et al.





Environmental Policies and Procedures; Proposed Rule

  Federal Register / Vol. 79 , No. 23 / Tuesday, February 4, 2014 / 
Proposed Rules  

[[Page 6740]]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Parts 1703, 1709, 1710, 1717, 1720, 1721, 1724, 1726, 1737, 
1738, 1739, 1740, 1753, 1774, 1775, 1779, 1780, 1781, and 1782

Rural Business-Cooperative Service

Rural Housing Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1924, 1940, 1942, 1944, 1948, 1951, 1955, 1962, 1970, 
and 1980

Rural Housing Service

7 CFR Parts 3550, 3560, 3565, 3570, and 3575

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Parts 4274, 4279, 4280, 4284, and 4290

RIN 0575-AC56


Environmental Policies and Procedures

AGENCY: Rural Housing Service, Rural Business-Cooperative Service, 
Rural Utilities Service, Farm Service Agency, U.S. Department of 
Agriculture (USDA).

ACTION: Notice of proposed rulemaking.

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SUMMARY: Rural Development, a mission area within the U.S. Department 
of Agriculture comprised of the Rural Housing Service (RHS), Rural 
Business-Cooperative Service (RBS) and Rural Utilities Service (RUS), 
hereafter referred to as the Agency, is proposing to unify and update 
environmental policies and procedures covering all Agency programs by 
consolidating two existing Agency regulations that implement the 
National Environmental Policy Act (NEPA) and other applicable 
environmental requirements. These rules supplement the regulations of 
the Council on Environmental Quality (CEQ), the regulations of the 
Advisory Council on Historic Preservation (ACHP), associated 
environmental statutes, Executive orders and Departmental Regulations. 
The majority of the proposed changes relate to the categorical 
exclusion provisions in the Agency's procedures for implementing NEPA. 
These proposed changes are intended to better align the Agency's 
regulations, particularly for those actions listed as categorical 
exclusions, to the Agency's current activities and recent experiences 
and to the CEQ's Memorandum for Heads of Federal Departments and 
Agencies entitled ``Establishing, Applying, and Revising Categorical 
Exclusions under the National Environmental Policy Act'' issued on 
November 23, 2010, and to consolidate the provisions of the Agency's 
two current NEPA rules at 7 CFR parts 1794 and 1940, subpart G.

DATES: Comments on the proposed rule must be received on or before 
April 7, 2014. Comments on the reporting and recordkeeping aspects of 
this rule in accordance with the Paperwork Reduction Act of 1995 
continue through April 7, 2014.

ADDRESSES: You may submit comments to this rule by any of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. Postal Service 
to the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, STOP 0742, 1400 Independence Avenue SW., 
Washington, DC 20250-0742.
     Hand Delivery/Courier: Submit written comments via Federal 
Express Mail or other courier service requiring a street address to the 
Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, 300 7th Street SW., 7th Floor, Suite 701, 
Washington, DC 20024.
    All written comments will be available for public inspection during 
regular work hours at the 300 7th Street SW., 7th Floor address listed 
above.

FOR FURTHER INFORMATION CONTACT: Mark S. Plank, Director, Environmental 
and Engineering Staff, Rural Utilities Service, Stop 1571, 1400 
Independence Ave. SW., Washington, DC 20250-1571; email: 
[email protected]; telephone: (202) 720-1649.

SUPPLEMENTARY INFORMATION: 

I. Introduction and Background

    This section describes NEPA requirements, including the different 
levels of environmental review, and a description of how the Agency 
makes a determination regarding the appropriate level of environmental 
review. It also describes the Agency's mission and its current NEPA-
implementing regulations.

A. National Environmental Policy Act

    NEPA (Pub. L. 91-190, 42 U.S.C. 4321-4370) establishes a national 
environmental policy to, among other things, ``create and maintain 
conditions under which man and nature can exist in productive harmony'' 
(42 U.S.C. 4331(a)); sets goals for the protection, maintenance, and 
enhancement of the environment; and provides a process for carrying out 
the policy and working toward those goals. NEPA also created the 
Council on Environmental Quality (CEQ), which was later directed, by 
Executive order, to promulgate binding regulations to guide all Federal 
agencies in preparation of agency-specific regulations for implementing 
NEPA (Executive Order No. 11514, ``Protection and Enhancement of 
Environmental Quality'' [March 5, 1970], as amended by Executive Order 
No. 11991, ``Relating to Protection and Enhancement of Environmental 
Quality'' [May 24, 1977]). The CEQ regulations can be found at 40 CFR 
1500-1508 and are referenced in this proposed rule.
    As set forth in CEQ's NEPA-implementing regulations, the NEPA 
process requires different levels of environmental review and analysis 
of Federal agency actions, depending on the nature of the proposed 
action and the context in which it would occur. The three levels of 
analysis are: Categorical exclusion (CE), environmental assessment 
(EA), and environmental impact statement (EIS).
    A CE is a category of actions that each Federal agency determines, 
by regulation, do not individually or cumulatively have a significant 
effect on the human environment (40 CFR 1508.4). The agency's 
procedures must provide for ``extraordinary circumstances'' in which a 
normally categorically excluded action may have a significant 
environmental effect. Examples of Agency CEs are routine financial 
transactions including, but not limited to, refinancing of debt; loans 
for purchase of real estate or equipment; and small-scale construction. 
Even if a proposed action is classified by an agency as a CE, such 
proposed action is still screened for any extraordinary circumstances 
that would indicate a potential to have significant impacts. If a CE 
applies, and there are no extraordinary circumstances, the Federal 
agency typically documents that determination in the project file. If, 
however, a CE applies and the agency determines that there are 
extraordinary circumstances, the agency would proceed to prepare an EA 
or an EIS.
    An EA is prepared to determine whether the impacts of a particular 
proposal might be significant (40 CFR 1508.9). In an EA, a Federal 
agency briefly describes the need for the proposal, alternatives to the 
proposal, and the potential environmental

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impacts of the proposed agency action and alternatives to that action, 
including the no action alternative. An EA results in either a Finding 
of No Significant Impact (FONSI) or a determination that the 
environmental impact may be significant and therefore an EIS is 
required.
    A Federal agency is required to prepare an EIS for any major 
Federal action that may significantly affect the quality of the human 
environment (NEPA, 42 U.S.C. 4332(2)(C)). The EIS must include a 
detailed evaluation of: (1) The environmental impacts of the proposed 
action; (2) any adverse environmental effects that cannot be avoided; 
(3) alternatives to the proposed action; (4) the relationship between 
local, short-term resource uses and the maintenance and enhancement of 
long-term ecosystem productivity; and (5) any irreversible and 
irretrievable commitments of resources. NEPA requires that this 
evaluation be started once a proposal is concrete enough to warrant 
analysis and must be completed at the earliest possible time to ensure 
that planning and implementation decisions reflect the consideration of 
environmental values.

B. Agency's Mission

    By statutory authority, the Agency is the leading Federal advocate 
for rural America, administering a multitude of programs, ranging from 
housing and community facilities to infrastructure and business 
development. Its mission is to increase economic opportunity and 
improve the quality of life in rural communities by providing the 
leadership, infrastructure, venture capital, and technical support that 
enables rural communities to prosper. The Agency supports these 
communities in a dynamic global environment defined by the Internet 
revolution, and the rise of new technologies, products, and new 
markets.
    To achieve its mission, the Agency provides financial support 
(including direct loans, grants, and loan guarantees) and technical 
assistance to help enhance the quality of life and provide the 
foundation for economic development in rural areas. Like all Federal 
agencies, the Agency is responsible for determining the appropriate 
level of review for every proposed action. As part of the Agency's 
environmental review responsibilities under NEPA, the Agency's 
responsible official examines an individual proposed action to 
determine whether it qualifies for a CE under the Agency's NEPA 
regulations. The Agency's process is consistent with that described in 
guidance issued by CEQ on establishing, applying, and revising CEs 
(``Final Guidance for Federal Departments and Agencies on Establishing, 
Applying, and Revising Categorical Exclusions Under the National 
Environmental Policy Act'' (CEQ CE Guidance)(75 FR 75628 (2010)). This 
guidance states:

    ``When determining whether to use a categorical exclusion for a 
proposed activity, a Federal agency must carefully review the 
description of the proposed action to ensure that it fits within the 
category of actions described in the categorical exclusion. Next, 
the agency must consider the specific circumstances associated with 
the proposed activity, to rule out any extraordinary circumstances 
that might give rise to significant environmental effects requiring 
further analysis and documentation'' in an EA or EIS (75 FR at 
75631).

    The Agency's existing and proposed regulations ensure that the 
Agency's responsible official follows the steps described by CEQ for 
determining whether a CE for a particular proposed action exists. The 
Agency requires applicants to describe their proposals in sufficient 
detail to enable the Agency to determine the required level of NEPA 
review. If the proposed action does not fall within an established CE 
or if there are extraordinary circumstances, the Agency's responsible 
official then determines if the action is one that normally requires 
the preparation of an EA or EIS. Those types of actions are specified 
in the Agency's existing and proposed regulations.
    If a proposed action, which is not a CE, does not normally require 
the preparation of an EIS, the Agency's responsible official will 
proceed to prepare an EA to determine if the potential environmental 
impacts of the proposed action may be significant. If the Agency 
concludes, based on the EA, that the impacts would not be significant, 
the Agency will prepare and issue a FONSI. If, however, the Agency 
concludes that the impacts may be significant, the Agency's responsible 
official will proceed to issue a notice of intent to prepare an EIS.
    The Agency's procedures for determining whether to apply a CE or to 
prepare an EA or EIS and the manner in which those determinations are 
documented are set forth in the Agency's existing and proposed NEPA 
regulations.
    To achieve the Agency's mission and to improve the delivery of its 
programs, the Agency intends to consolidate and update the existing 
environmental regulations to eliminate confusion between the two 
existing NEPA regulations and to facilitate NEPA reviews.

C. Current Agency NEPA Regulations

    Each Federal agency's NEPA implementing procedures are specific to 
the actions taken by that agency and supplement the CEQ regulations (40 
CFR 1507.3). Both RHS/RBS and RUS have promulgated Agency NEPA 
regulations. The Agency also completes various other review 
requirements for its programs under the umbrella of NEPA, including 
historic preservation reviews under 16 U.S.C. 470f of the National 
Historic Preservation Act, and consultation on federally-listed species 
under 16 U.S.C. 1536 of the Endangered Species Act.
    The environmental policies and procedures currently utilized by RHS 
and RBS to implement NEPA were published as a final rule by the Farmers 
Home Administration (FmHA) on January 30, 1984 (7 CFR part 1940, 
subpart G, 49 FR 3724) and were amended on September 19, 1988 (53 FR 
36266). RHS and RBS are successor agencies to FmHA, which ceased to 
exist on October 20, 1994, pursuant to The Agricultural Reorganization 
Act of 1994 (Pub. L. 103-354). Also pursuant to this Act, the farm 
programs under FmHA were transferred to the Farm Service Agency (FSA) 
that was established by the 1994 USDA reorganization.
    RUS was established as part of the same 1994 USDA reorganization 
that established RHS and RBS, and is comprised of Rural Electrification 
Administration (REA) programs combined with the Water and Waste Program 
from the former FmHA. The environmental policies and procedures 
currently applicable to RUS programs were published as a final rule on 
March 13, 1984, by the REA (7 CFR part 1794, 49 FR 9544), were revised 
and published as a final rule in 1998 (63 FR 68648) to accommodate the 
1994 USDA reorganization, and have been amended through 2003 (68 FR 
45157).
    The Agency's existing regulations for implementing NEPA need to be 
updated to reflect the Agency's current structure and programs, CEQ 
guidance documents, and Executive orders. In addition, the Agency 
proposes to consolidate the Agency's approach to environmental reviews 
for all assistance programs within the USDA Rural Development mission 
area, rather than having separate NEPA procedures for RHS/RBS and RUS.
    Under the proposed rule, 7 CFR part 1970 will replace 7 CFR part 
1794 for RUS and 7 CFR part 1940, subpart G, for RBS and RHS. While 7 
CFR part 1940, subpart G, will no longer apply to RHS

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and RBS, it will continue to apply to FSA.

II. Purpose of the Proposed Agency NEPA Regulations

    Under 7 CFR part 1970, subparts A through D, the Agency proposes to 
consolidate, simplify, and update the two existing NEPA rules. Although 
some substantive policy changes are being proposed to reflect recent 
environmental policies of Executive Orders and CEQ guidance, the 
Agency's main goal is to update and merge the two sets of existing 
regulations, rather than to promulgate new rules or requirements. The 
Agency believes that a consolidated environmental rule will be easier 
to read, understand, and use. In preparing the consolidated rule, the 
Agency sought to combine the requirements from both 7 CFR part 1940, 
subpart G, and 7 CFR part 1794 to eliminate redundancy; promote 
consistency among the RHS, RBS, and RUS programs; and reduce confusion 
on the part of applicants for Agency financial assistance and the 
public.
    The proposed changes are intended to (1) better align the Agency's 
regulations with the CEQ NEPA regulations and recent guidance, and (2) 
update the provisions with respect to current technologies (e.g., 
renewable energy) and new and recent regulatory requirements.
    The proposed consolidation encompasses the CEs currently in 7 CFR 
part 1940, subpart G, and in 7 CFR part 1794. In addition, the Agency 
is proposing to modify and add to its list of CEs in a manner 
consistent with CEQ regulations and guidance. CEQ encourages the 
development and use of CEs and has identified them as an ``essential 
tool'' in facilitating NEPA implementation so that more resource-
intensive EAs and EISs can be ``targeted toward proposed actions that 
truly have the potential to cause significant environmental impacts.'' 
(CEQ CE Guidance, 75 FR at 75631). Appropriate reliance on CEs provides 
a reasonable, proportionate, and effective analysis for many proposed 
actions, thereby helping agencies reduce paperwork (40 CFR 1508.4) and 
delay (40 CFR 1508.5).

III. Invitation To Comment

    The Agency encourages interested persons and organizations to 
submit written comments, which may include data, suggestions, or 
opinions. Commenters should include their name, address, and other 
appropriate contact information. Comments may be submitted by any of 
the means identified under ADDRESSES. Comments submitted by mail or 
hand delivery should be submitted in an unbound format, no larger than 
letter-size, suitable for copying and electronic filing. If 
confirmation of receipt is requested, a stamped, self-addressed, 
postcard or envelope should be enclosed. The Agency will consider all 
comments received during the comment period and will address comments 
in the preamble to the final regulation. Tribal consultation will be 
conducted during the public comment period for the proposed rule.

IV. Description of the Proposed Changes to the Agency's NEPA 
Regulations

    The Agency is proposing both organizational and substantive changes 
to its NEPA-implementing regulations. These changes are described 
below. A section-by-section analysis of individual changes is provided 
in Section V.

A. Organizational Changes

    Consolidation of the Agency's two existing rules for implementing 
the procedural provisions of NEPA and other applicable environmental 
requirements will simplify program application processes for applicants 
by making environmental requirements more clear and consistent across 
all programs.
    In addition, under the proposed rule, NEPA procedures have been 
reorganized and revised to simplify provisions, as well as to provide 
more concise and comprehensive discussions of specific topics. In some 
cases, detail was removed because it relates primarily to internal 
Agency processes and thus is more appropriately addressed in staff 
instruction for Agency personnel or in separate guidance to applicants. 
For example, the Agency proposes to eliminate Exhibits A-M in 7 CFR 
part 1940, subpart G because these exhibits are internal guidance.
    In other instances, additional clarification and detail were added 
to ensure consistency in NEPA compliance and implementation across all 
Agency programs. For example, additional detail was added to 
discussions of applicant responsibilities, definitions, actions subject 
to NEPA, limitations on actions during the NEPA process, scoping, 
public notices, and interagency cooperation.
    The proposed NEPA regulations, which are intended to supplement the 
CEQ regulations, are organized into four subparts as described below:
    Subpart A--Environmental Policies. This subpart contains the 
environmental policies and procedures of the Agency that integrate 
NEPA, as amended, with the planning, environmental review processes, 
and consultation procedures required by the environmental statutes, 
regulations, and Executive orders applicable to Agency programs.
    Subpart B--NEPA Categorical Exclusions (CE). This subpart contains 
the descriptions of those categories of actions that the Agency has 
determined do not individually or cumulatively have a significant 
effect on the human environment. In consolidating and reorganizing the 
proposed CEs, the Agency grouped them by activity (e.g., routine 
financial actions) rather than by particular Agency program (e.g., 
Water and Waste or Community Facilities). The Agency took this approach 
to make clear that all CEs are applicable to each of the 86 programs 
the Agency currently administers, as long as the conditions within the 
CE are met and there are no extraordinary circumstances.
    Subpart C--NEPA Environmental Assessments (EA). This subpart 
describes actions that require the preparation of an EA to determine 
whether the impacts of a proposed action may be significant and thus 
whether preparation of an EIS is warranted. It also describes the 
requisite components of an EA and FONSI, and includes a provision on 
supplementing an EA.
    Subpart D--NEPA Environmental Impact Statements (EIS). This subpart 
describes actions for which the Agency will prepare an EIS. It also 
describes the contents of an EIS and a Record of Decision (ROD), which 
is the last step in the EIS process.

B. Substantive Changes

    The Agency is also proposing consolidation of and substantive 
changes to its CEs, classification criteria and procedures for 
preparing EAs, and the preparation of EISs by third-party contractors. 
These proposed changes are described below.
1. Categorical Exclusions
    The Agency is proposing to modify and add a number of CEs. In 
addition to combining the existing RHS/RBS and RUS CEs, the Agency is 
proposing some revisions to the existing CEs and is proposing new CEs. 
Further, the Agency recognizes that some CEs have a potential for 
significant environmental impacts because of the possible presence of 
extraordinary circumstances, such as sensitive environmental resources. 
For these CEs, the Agency is proposing to require applicants to submit 
environmental documentation regarding their requests for financial 
assistance. Finally, the Agency is proposing to add several CEs based 
on the experience of the Agency

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and, in accordance with 40 CFR 1507.3(a), other Federal agencies with 
similar programs.
    In addition to modifying existing CEs and adding new CEs, the 
Agency is proposing to eliminate several CEs currently listed in the 
RHS/RBS and RUS NEPA regulations because the Agency no longer 
undertakes those types of actions as a result of the 1994 USDA 
reorganization. These proposed modifications are described in more 
detail below. The section-by-section analysis in Section V.B describes 
the basis for each proposed CE as well as for the elimination of some 
CEs, currently specified in either 7 CFR part 1794 or 7 CFR part 1940, 
subpart G.
    a. New and Revised CEs. Most of the proposed CEs are found in the 
existing Agency NEPA regulations. However, the Agency is proposing to 
revise the language of some existing CEs to reflect current agency 
programs. These revisions clarify, and in some instances, expand the 
applicability of the CEs and make the scope and quantitative aspects of 
the CEs more consistent with those adopted by other Federal agencies 
engaged in similar or identical actions. Such expansion includes the 
re-classification of Class I EAs, currently provided for in the 
existing RHS and RBS regulations as EAs for actions with low potential 
to effect environmental quality (7 CFR 1940.311), as CEs. Based on the 
EAs and FONSIs that have been prepared for these actions since 1984, 
the Agency has concluded that these types of activities, absent the 
presence of extraordinary circumstances, do not individually or 
cumulatively have significant environmental effects and thus are more 
appropriately classified as CEs.
    In addition, the Agency is proposing new CEs to address Agency 
programs that have been enacted since the existing NEPA regulations 
were last updated. The range of Agency activities and programs has 
changed and expanded since the Agency's NEPA regulations were 
promulgated and later amended, growing to more than 86 programs in 
2012.
    In particular, there has been tremendous growth and development in 
the areas of energy efficiency and renewable energy. Over the last 
several years, this growth has given the Agency and other Federal 
agencies (e.g., the Department of Energy (DOE)), extensive experience 
with assessing the potential environmental impacts of these 
technologies. With the increase in development of energy efficiency and 
renewable energy, has come an increase in the number of applications to 
the Agency for financial assistance to promote energy efficiency and 
alternative energy development.
    The Agency's proposal to add CEs based on the Agency's own 
experience as well as that of other Federal agencies is consistent with 
the CEQ CE Guidance. As CEQ noted in that guidance, a Federal agency 
may ``substantiate a categorical exclusion of its own based on another 
agency's experience with a comparable categorical exclusion and the 
administrative record developed when the other agency's categorical 
exclusion was established'' (CEQ CE Guidance, 75 FR at 75634). For 
several of the new CEs being proposed by the Agency, the Agency is 
relying on DOE's extensive experience with energy projects, which DOE 
has used in recent revisions to its own NEPA rule (76 FR 63764 (2011)). 
DOE's revised NEPA rule included several modifications and additions to 
its CEs, particularly relating to energy efficiency and renewable 
energy technologies. The Agency has reviewed DOE's CEs and the basis 
for those CEs, and has determined that many DOE actions eligible for a 
CE are comparable to actions undertaken by the Agency.
    In the text of the proposed CEs, and as is done in the CEs in its 
existing regulations, the Agency uses the terms ``small,'' ``small-
scale,'' ``minimal,'' and ``minor'' to limit the types and potential 
impacts of the activities that are eligible for a CE. While the Agency 
does not intend to define these terms specifically, in determining 
whether a particular proposed action qualifies for a CE, the Agency 
considers those terms in the context of a particular proposal, 
including its proposed size and location.
    In assessing whether these terms apply to a particular proposed 
action, the Agency currently considers and would continue to consider 
factors such as industry norms, the relationship of the proposed action 
to similar types of development in the vicinity of the proposed action, 
and expected outputs of emissions or waste, in addition to the 
magnitude of the proposal. When considering the physical size of a 
proposed facility, for example, Agency environmental staff reviews the 
surrounding land uses, the scale of the proposed facility relative to 
existing development, and the capacity of existing roads and other 
infrastructure to support the proposed action. This approach is similar 
to and consistent with that undertaken by DOE in the application of its 
CEs, as described in its recent NEPA rulemaking (76 FR 63764, 63768 
(2011)).
    The proposed rule also uses the term ``previously disturbed or 
developed'' to limit potential environmental impacts of CEs. The Agency 
has determined, based on experience, that the potential for certain 
actions to have significant impacts on the human environment is 
generally avoided when the action takes place within a previously 
disturbed or previously developed area. ''Previously disturbed or 
developed'' refers to land that has been changed such that its 
functioning ecological processes have been and remain altered by human 
activity. The phrase encompasses areas that have been transformed from 
natural cover to non-native species or a managed state, including, but 
not limited to, utility and electric power transmission corridors and 
rights-of-way, and other areas where active utilities and currently 
used roads are readily available. This approach is similar to and 
consistent with that undertaken by DOE in the application of its CEs, 
as described in its recent NEPA rulemaking (76 FR 63764, 63768 (2011)).
    For some proposed CEs, the Agency proposes the use of quantitative 
limitations or thresholds (acres, miles, feet, megawatts, kilovolts) to 
help further limit the potential for significant environmental impacts. 
These threshold values are based on the Agency's past experience in 
applying its existing CEs and preparing EAs that resulted in FONSIs, 
where actual project sizes could be correlated to impacts. The Agency's 
experience has shown that the proposal size is directly linked to 
impacts, where the greater the potential area affected, the greater the 
potential for significant impacts. In many cases, the threshold values 
are the same as those used in the existing Agency NEPA regulations. In 
other instances, however, changes in thresholds have been proposed to 
promote consistency among Agency programs and with the environmental 
requirements of other Federal agencies' programs that are similar in 
nature.
    The Agency has reviewed and deliberated each proposed CE with 
respect to concept, coverage, applicability, and wording; and carefully 
examined the portion of the administrative record associated with each 
CE to ensure that the proposed CE fulfills the goal of balancing 
increased administrative efficiency with the avoidance of 
misinterpretations and misapplications of exclusionary language that 
could lead to non-compliance with NEPA requirements. The Agency has 
concluded that the proposed CEs encompass activities that have no 
inherent potential for significant impacts. Many of the Agency's 
conclusions regarding specific categorical exclusions are supported by

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other Federal agencies that have established CEs for activities similar 
in nature, scope, and impact to those contemplated by the Agency. Based 
on the Agency's experience and that of other Federal agencies, the 
Agency determined that, in the absence of extraordinary circumstances, 
its proposed CEs will not individually or cumulatively pose significant 
environmental impacts.
    b. Documentation Requirements. The Agency's proposed CEs are 
divided into two sections. The proposed CEs in Sec.  1970.53 involve no 
or minimal construction and generally involve routine financial 
actions, information gathering activities, or modifications to existing 
facilities. For that reason, these CEs, due to their narrow scope, do 
not have the potential for extraordinary circumstances. Therefore, the 
CEs listed in proposed Sec.  1970.53 would not require applicants to 
provide environmental documentation with their applications. 
Nonetheless, applicants may be required to provide environmental 
documentation at the Agency's request.
    The CEs listed in proposed Sec.  1970.54 would require applicants 
to submit environmental documentation with their applications for 
financial assistance. In the Agency's view, these proposed CEs 
involving small-scale development have an increased potential for 
disturbance of sensitive resources. Thus, the Agency proposes to 
require applicants to submit information regarding their proposals, 
including detailed site plans, location maps, and environmental 
surveys, to allow the Agency to determine whether there could be 
extraordinary circumstances.
    An environmental report is currently required for CEs listed in 
RUS's NEPA regulation at 7 CFR 1794.22. Not all of those existing CEs 
would require documentation under the Agency's proposed NEPA rule, 
based on the Agency's conclusion that, for certain actions, 
environmental documentation is not necessary because of the low 
probability for extraordinary circumstances.
    However, the Agency also concluded that some CEs that do not 
currently require an environmental report under the existing 
regulations at 7 CFR 1794.21 do have the potential for extraordinary 
circumstances. Thus, under the proposed rule, those proposed actions 
would require an applicant to submit environmental documentation. It 
should be noted that the environmental documentation required for CEs 
proposed in Sec.  1970.54 is less than the information currently 
required for an environmental report (see 7 CFR 1794.32; RUS Bulletins 
1794A-600 and 1794A-602). For those RHS and RBS Class I EA actions that 
are now proposed as CEs under part 1970, the documentation requirements 
would be similar to that provided in the RD 1940-20 form currently 
required under Sec.  1940.311.
    Differences between the existing and proposed CEs are addressed in 
more detail in the section-by-section analysis in Section V.B.
    c. Multi-Tier Actions. Subpart B also provides that the Agency's 
approval of the initial funding to multi-tier entities (primary 
recipients) would be classified as CEs. Commitments of financial 
assistance to primary recipients who will, in turn, provide financial 
assistance in the future to qualified second tier or ultimate 
recipients under certain terms and conditions (Sec.  1970.55) would be 
subject to further environmental review by the Agency. The Agency will 
conduct its review in accordance with this part and on a case-by-case 
basis at the time when projects and ultimate beneficiaries are defined.
    d. Eliminated CEs. The Agency is proposing to remove several types 
of actions from its list of CEs. Most of these relate to programs that 
are no longer under the purview of the Agency, except as noted below:
    The following existing CEs involving subdivisions are being 
eliminated:
     Sec.  1940.310(b)(2) The approval of an individual 
building lot that is located on a scattered site and either not part of 
a subdivision or within a subdivision not requiring Rural Development's 
approval
     Sec.  1940.310(b)(5) The approval of a subdivision that 
consists of four or fewer lots and is not part of, or associated with, 
building lots or subdivisions
     Sec.  1940.310(b)(8) The financing of housing construction 
or the approval of lots in a previously approved Rural Development 
subdivision. Please note that the financing of the housing construction 
portion of this CE has been incorporated into Sec.  1970.53(c)(4).
    The Agency proposes to eliminate Sec. Sec.  1940.310(c)(3) and 
1794.21(c)(1), which refer to project management actions relating to 
invitation for bids, contract award, and the actual physical 
commencement of construction activities. These actions occur after the 
Agency has completed the NEPA process and has obligated funds for the 
project. Thus, these actions would have already been addressed as part 
of the request for financial assistance, and a separate section is not 
necessary.
    The Agency also proposes to eliminate Sec. Sec.  1940.310(d)(1) 
through 1940.310(d)(11), which are programs administered by FSA and are 
not eligible for Agency financing.
    Finally, the Agency proposes to eliminate Sec.  1794.22(b)(6), 
which refers to previously categorically excluded loan closing and 
servicing activities for which the purpose, operation, location, or 
design may have changed. The Agency recognizes that a previously 
approved action that is later altered would need to be re-examined to 
determine if the original application of the CE was still appropriate 
given the change in purpose, operation, location, or design. If the CE 
was no longer appropriate, the Agency would proceed to prepare an EA, 
or if necessary, an EIS.
    All other CEs that are currently contained in 7 CFR parts 1940, 
subpart G, and 1794 are proposed for inclusion in the proposed CEs in 
Sec.  1970.53 or 1970.54. For example, Sec.  1794.21(b)(26), which 
refers to ``New bulk commodity storage and associated handling 
facilities within existing fossil-fueled generating station boundaries 
for the purpose of co-firing bio-fuels and refuse derived fuels'' is 
now included in proposed Sec.  1970.54(a), ``Small-scale site-specific 
development,'' as long as the conditions of the CE are met and there 
are no extraordinary circumstances. For proposed Sec.  1970.54(a) in 
particular, the Agency intends that proposals for financial assistance 
that fall within the stated parameters of the CE be eligible for a CE 
even though the proposed action may not be specifically listed as an 
example.
2. EA Policy
    The Agency is proposing to eliminate the distinction in the RHS/RBS 
regulations for Class I and Class II EAs and the distinction in the RUS 
regulations for EAs with and without scoping. The Agency is also 
proposing to provide a formal process for the public review of EAs. 
These changes are described below.
    a. Elimination of EA Categories. In the existing regulations, RHS 
and RBS distinguish between Class I and Class II EAs. Class I EAs are 
defined as those actions that are not listed as CEs and that require 
the preparation of an EA to determine if the proposal will have a 
significant impact on the environment (7 CFR 1940.311). Class II EAs 
``have the potential for resulting in more varied and substantial 
environmental impacts'' and thus require a ``more detailed'' EA to 
determine if the proposed action requires the preparation of an EIS (7 
CFR 1940.312). Further, RUS lists proposed actions that will normally 
require an EA (7 CFR 1794.23) and separately lists proposed actions 
that

[[Page 6745]]

require a ``scoping procedure'' in the development of the EA (7 CFR 
1794.24).
    To simplify its EA process and to make its NEPA regulations 
consistent with the CEQ regulations (which do not recognize different 
EA classifications), the Agency is proposing to eliminate these two EA 
classes. Under the proposed rule, the Agency would prepare EAs for all 
forms of financial assistance unless such actions are CEs or require 
the preparation of an EIS (proposed Sec.  1970.101(b)). The proposed 
rule recognizes, however, that ``the amount of information and level of 
analysis provided in the EA must be commensurate with the magnitude of 
the proposal's activities and its potential to affect the quality of 
the human environment'' (proposed Sec.  1970.102(a)).
    As described more fully in the section-by-section analysis in 
Section V.C, several actions that were previously Class I EAs in the 
RHS and RBS regulations are now proposed as CEs because the Agency has 
concluded that those types of actions do not have the potential for 
imposing significant environmental impacts. All but one of these 
actions would require the applicant to submit environmental 
documentation to determine the presence or absence of extraordinary 
circumstances. Other actions that fall under the Class I EA 
classification would be eliminated because those actions are no longer 
undertaken by the Agency (i.e., the actions now fall under FSA's 
jurisdiction).
    Under the existing regulations, at the discretion of the Agency, 
the Agency may require scoping meetings depending on the complexity of 
the proposal. The Agency is now proposing to remove the distinction 
between proposals normally requiring an EA and those requiring an EA 
with scoping. This does not represent a change in procedure, but 
continues to allow the Agency to exercise its discretion. Accordingly, 
the Agency determined that a separate classification is not necessary.
    Except for proposals including electric transmission facilities of 
230 kV or more nominal operating voltage and 20 miles or more in 
length, the remainder of the actions specifically listed in Sec.  
1940.311 and Sec.  1940.312 (for RHS and RBS) and in Sec.  1794.23 and 
Sec.  1794.24 (for RUS) would require the preparation of an EA under 
the proposed NEPA rule. While the existing regulations define the 
specific proposals that require the preparation of an EA, the proposed 
rule simply states that all forms of financial assistance require the 
preparation of an EA unless they are categorically excluded or required 
to be the subject of an EIS. In light of the large number and varying 
types of programs implemented by the Agency, the proposed generic 
approach provides assurance that EAs will be prepared for proposals 
that may not have been previously encountered by the Agency and for 
future Agency programs.
    b. Public Review of EAs. The Agency is proposing to establish a 
formal EA public notice and participation process that is consistent 
with the CEQ regulations and the existing part 1794, recent case law, 
and other Federal agencies' requirements for EAs. The Agency's proposed 
procedures would require EAs to be made available for public review and 
comment prior to completion and issuance of a FONSI, if the Agency 
determines that on the basis of the EA there are no significant 
impacts. Although the CEQ regulations require agencies to involve the 
public in the preparation of EAs ``to the extent practicable'' (40 CFR 
1501.4(b)), there is no formal commenting requirement in those 
regulations. Federal agencies have typically declined to implement a 
public review and comment process similar to that required for EISs. 
Recently, however, courts have held that Federal agencies must permit 
some level of public participation when issuing an EA. Specifically, 
courts have held that a complete failure to involve or inform the 
public about an agency's preparation of an EA would violate NEPA. See, 
e.g., California Trout v. Federal Energy Regulatory Commission, 572 
F.3d 1003 (9th Cir. 2009).
    In keeping with the spirit of NEPA and the CEQ regulations and to 
follow the dictates of case law, the Agency is proposing a formal 
commenting process for EAs similar to that which is currently required 
under part 1794. This process would involve notification of the 
availability of an EA and the establishment of a 14- to 30-day public 
comment period. DOE has a similar provision in its NEPA regulations (10 
CFR 1021.301(d)).
3. Third-Party Contracting
    The Agency is proposing to improve efficiency in the NEPA process 
by revising the manner in which professional services of contractors to 
support the preparation of an EIS are procured. Under the proposed 
rule, applicants for financial assistance under all Agency programs 
would be required to fund EISs. In accordance with the CEQ regulations, 
applicants may undertake the necessary paperwork for the solicitation 
of a field of candidates under the Agency's direction and the Agency 
would select and approve all contractors (see proposed Sec.  1970.152). 
Although funding for an EIS by applicants is currently allowed under 
Sec.  1794.61, there is no similar provision in 7 CFR part 1940, 
subpart G. The proposed rule would allow all Agency programs to use a 
third-party contracting approach for the preparation of EISs.
    Third-party contracting offers a more efficient approach for the 
preparation of an EIS, however it does not change current Agency 
responsibilities. The Agency would also remain responsible for: 
Selecting the EIS contractor; participating in the preparation of the 
EIS; and independently evaluating the scope and content of the EIS. 
This action is proposed to improve both the efficiency and the 
effectiveness of the Agency's environmental review processes and 
represents an important contribution to the Agency's ongoing efforts to 
streamline its operations.

V. Section-by-Section Analysis of the Proposed Agency NEPA Regulation

    This section provides a detailed discussion of the proposed Agency 
NEPA regulation. For each section, the content of the proposed rule is 
briefly described. The Agency then discusses the manner in which the 
proposed rule relates to existing Agency NEPA regulations in part 1970, 
subpart G, and/or in part 1794. In most cases, the proposed rule is the 
same as an existing regulation or has been modified slightly for 
clarity or consistency between the RHS/RBS and RUS NEPA regulations. 
Where the Agency proposes substantive changes to its NEPA regulations, 
an explanation for the change is provided.

A. Subpart A--Environmental Policies

Purpose, Applicability, and Scope (Sec.  1970.1)
    This proposed section describes the purpose of the Agency's 
environmental policies and procedures, which is to ensure compliance 
with NEPA and other applicable environmental requirements. It also 
explains that the Agency's environmental policies and procedures 
supplement the CEQ NEPA regulations (40 CFR parts 1500 through 1508).
    This proposed section is similar to the information found in 
Sec. Sec.  1940.301 and 1794.1 (Purpose); however, it has now been 
consolidated and reorganized into three separate paragraphs relating to 
purpose, applicability, and scope. The applicability paragraph is new 
and clarifies that the proposed rule applies to all Agency programs 
(RHS, RBS, and RUS). It also expands the existing discussion of scope 
to indicate that the Agency will take into account CEQ's

[[Page 6746]]

guidance and memoranda interpreting NEPA to the extent appropriate. In 
addition, this section incorporates and is in conformity with the 
procedures of Section 106 of the National Historic Preservation Act 
(NHPA) and Section 7 of the Endangered Species Act (ESA).
    Some information in the existing regulations has been reorganized. 
Specifically, information relating to authorities, previously contained 
in Sec.  1940.301(c), has been moved to proposed Sec.  1970.3 
(Authority). Information contained in Sec.  1940.301(d) through (h), 
which covered a variety of topics (e.g., objectives and coordination 
with other agencies, responsible officials, covered actions, completion 
of an environmental review, and public involvement), are now captured 
elsewhere in the proposed rule, including: Sec. Sec.  1970.4 
(Policies), 1970.5 (Responsible Parties), 1970.8 (Actions Requiring 
Environmental Review), 1970.11 (Timing of the Environmental Review), 
and 1970.14 (Public Involvement).
    By consolidating the requirements found in the existing 
regulations, this proposed section helps provide for a single, 
consistent, streamlined process that all Agency programs will follow in 
complying with NEPA and other applicable environmental requirements. 
NHPA and ESA are now specifically referenced because these are 
important environmental reviews the Agency completes for its programs 
under the umbrella of NEPA.
Authority (Sec.  1970.3)
    This proposed section describes the many environmental laws, 
regulations, Executive orders, and USDA regulations that comprise the 
authority for the proposed 7 CFR part 1970. The list of authorities 
includes those found in the existing regulations (Sec. Sec.  
1940.301(c) and 1794.2), and has been updated and expanded to reflect 
new requirements that have been enacted since the existing regulations 
were published. These include new statutes, Executive Orders, 
Departmental regulations and a Departmental manual. In addition, two 
statutes referenced in Sec.  1940.301(c) are not proposed for inclusion 
in the proposed rule because they are only applicable to the FSA, which 
is no longer part of the Agency. The implementing regulations of those 
two statutes are: Title 7, Part 658, Code of Federal Regulations, 
Department of Agriculture, Soil Conservation Service, Farmland 
Protection Policy; and Title 7, part 12, Code of Federal Regulations, 
Highly Erodible Land and Wetland Conservation.
Policies (Sec.  1970.4)
    This proposed section states that it is Agency policy that 
applicant proposals must, whenever practicable, avoid or minimize 
adverse environmental impacts, conversion of wetlands and important 
farmlands, and development in floodplains where a practicable 
alternative \1\ exists to meet development needs. Further, it is Agency 
policy to encourage reuse of real property defined as ``brownfields'' 
where possible; lend support to initiatives, resolutions, and programs 
designed to maximize international cooperation in addressing 
environmental problems; and consider opportunities to reduce greenhouse 
gas emissions. This proposed section is a consolidation of Sec. Sec.  
1940.303 (General policy) relating to the Agency decision-making 
process and the need to consider environmental impacts and alternatives 
early in the process; 1940.304 (Special policy) including special 
policies relating to land use and sensitive environmental resources; 
and 1940.305 (Policy implementation) relating to Agency 
responsibilities for environmental impact analysis, natural resource 
management, intergovernmental initiatives, and other protected 
resources. There is no analogous section in part 1794. The proposed 
section has also been updated to reflect new USDA policies, such as 
using the NEPA process, to the extent possible, to identify and 
encourage opportunities to reduce greenhouse gas emissions.
---------------------------------------------------------------------------

    \1\ ``Practicable alternative'' is the term used in Executive 
order 11988, Floodplain Management. NEPA requires consideration of 
``reasonable'' alternatives in EAs and EISs.
---------------------------------------------------------------------------

Responsible Parties (Sec.  1970.5)
    This proposed section describes the responsibilities of the Agency 
and applicants. The Agency is responsible for all environmental 
decisions and findings related to its actions, and for compliance with 
all environmental laws, regulations, and Executive orders. The Agency 
responsibilities described are consistent with those identified in the 
CEQ regulations at 40 CFR 1506.5 (Agency responsibility).
    With respect to the Agency's responsibilities, this proposed 
section is similar to Sec.  1794.5 relating to the Agency's 
responsibility to comply with all environmental laws and Agency 
programs. It also includes the general Agency responsibilities found in 
7 CFR part 1940, subpart G, but does not include most of the specific 
descriptions of Agency responsibilities found in Sec. Sec.  1940.306 
(National Office), 1940.307 (State Office), 1940.308 (District and 
County Office levels), and 1940.316, describing the duties of 
responsible officials specific to the environmental review process. 
These provisions were eliminated because the information concerns 
internal agency policy and procedures.
    In addition, the proposed section highlights specific Agency 
responsibilities relating to mitigation measures. While these are not 
new to Agency NEPA practices, they are more clearly described in the 
proposed rule in order to be consistent with CEQ regulations and 
provide clarity to applicants and Agency staff. These responsibilities 
are consistent with the CEQ regulations (40 CFR 1505.2(c) and 1505.3) 
and with recent CEQ guidance on mitigation and monitoring (Final 
Guidance for Federal Departments and Agencies on the Appropriate Use of 
Mitigation and Monitoring and Clarifying the Appropriate Use of 
Mitigated Findings of No Significant Impact, 76 FR 3843 (2010)). In 
particular, the proposed rule makes it clear that the Agency will 
include mitigation measures, as identified in the environmental review 
documentation, in Agency loan and grant commitment documents and that 
the Agency, guaranteed lender, or multi-tier primary recipients are 
responsible for monitoring and tracking the implementation, 
maintenance, and effectiveness of any required mitigation measures.
    Provisions relating to the Agency's responsibility as a lead or 
cooperating agency are currently found in Sec. Sec.  1940.325 (relating 
to being a cooperating agency), 1940.326 (related to being a lead 
agency), and 1794.14 (related to interagency involvement). Rather than 
repeating the CEQ regulations with regard to the definition and role of 
lead and cooperating agencies, however, the Agency proposes to simply 
reference the CEQ regulations in the proposed rule.
    With respect to applicant responsibilities, most of the provisions 
in Sec. Sec.  1940.309 and 1794.10 relating to an applicant's 
responsibility to prepare applicable environmental documentation are 
included in this proposed section. The Agency also proposes two 
additions. First, the Agency proposes to specify when it is appropriate 
for an applicant to coordinate and consult with state, Federal, and 
tribal agencies under Section 106 of NHPA. The circumstances in which 
an applicant may contact state, Federal, and tribal agencies directly 
is not addressed in the existing regulations and has been the

[[Page 6747]]

source of some confusion among Agency staff and applicants.
    In this section, the Agency also proposes to provide additional 
detail on and clarification of applicant's responsibilities relating to 
the type and adequacy of environmental information that must be 
submitted to the Agency in support of a request for financial 
assistance (e.g., environmental review information, supporting 
technical studies, or an EA). Reference to Agency forms (Request for 
Environmental Information) included in Sec.  1940.309 has been 
eliminated because they will no longer be used.
    The proposed section also describes the obligation of an applicant 
to assist the Agency in preparing an EIS such as conducting public 
involvement activities, issuing notices, and funding third-party 
contractors. Finally, this proposed section specifies that the Agency's 
consideration of a request for financial assistance may be affected by 
the applicant's willingness to cooperate with the Agency on 
environmental compliance.
Definitions and Acronyms (Sec.  1970.6)
    This proposed section includes many, but not all, of the 
definitions found in the existing regulations at Sec. Sec.  1940.302 
and 1794.6. A list of acronyms relevant to the environmental review 
process within the Agency is also proposed to aid readers.
    The existing regulations include some defined terms that have not 
been included in the proposed regulation because they are specific to 
only one Agency program, are no longer needed or used, are not directly 
related to the environmental review process, and/or are already defined 
in the CEQ regulations. The following terms defined in the existing 
regulations are not included in the proposed regulation:
     From 7 CFR 1940.302--``environmental review documents'' 
(refers to Agency forms no longer used), ``flood/flooding,'' (specific 
to one resource and better suited to staff instruction and/or applicant 
guidance), ``floodplains'' (critical action floodplain component is 
proposed for inclusion in the critical action definition), ``indirect 
impacts'' (defined in CEQ regulations under ``effects'' in 40 CFR 
1508.8), ``mitigation measure'' (defined in CEQ regulations under 
``mitigation'' in 40 CFR Sec.  1508.20), ``practicable'' alternative 
(to be consistent with CEQ regulations that address ``reasonable'' 
alternatives at Sec.  1502.14), ``preparer of environmental review 
documents'' (proposed for inclusion in staff instruction), and ``water 
resource project'' (specific to one program).
     From 7 CFR 1794.6--``Environmental Report,'' ``equivalent 
dwelling unit,'' ``important land resources,'' ``load design,'' 
``multiplexing center,'' ``Natural Resource Management Guide,'' 
``Supervisory Control and Data Acquisition System,'' and ``Third-Party 
Consultant.'' ``Third-party consultant'' is addressed under third-party 
contracting in proposed Sec. Sec.  1970.5, 1970.11, and 1970.152. The 
rest of the terms are specific to RUS programs and, in some instances, 
refer to internal documents (Environmental Reports and Natural Resource 
Management Guides) that are not referenced in the proposed regulations. 
Such terms are better placed in staff instruction and/or applicant 
guidance.
    The following definitions have been retained in the proposed rule, 
although some have been modified for additional clarification or to 
ensure applicability to all Agency programs. These are: ``Emergency'' 
(replaces ``emergency situation'') and ``no-action alternative'' in 
Sec.  1940.302; and ``applicant,'' ``construction work plan,'' 
``distributed resources'' (replaces ``distributed generation''), 
``environmental review,'' ``loan/system designs'' (replaces ``loan 
design''), and ``preliminary architect/engineering report'' (replaces 
``preliminary engineering report'') in Sec.  1794.6.
    New definitions are proposed for the following terms: ``Agency,'' 
``critical action,'' ``design professionals,'' ``financial 
assistance,'' ``guaranteed lender'', ``historic property,'' ``Indian 
tribe,'' ``multi-tier recipient,'' and ``loan servicing actions.'' Such 
terms define actions (critical action, loan-servicing action), entities 
(multi-tier recipients, guaranteed lender, design professionals), and 
other terms not previously defined, but that are important to 
environmental policies and procedures within the Agency.
Actions Requiring Environmental Review (Sec.  1970.8)
    This proposed section identifies the types of actions that the 
Agency considers to be major Federal actions subject to the 
requirements of NEPA and other applicable environmental requirements.
    This proposed section is based on and further clarifies information 
found in Sec.  1794.20 regarding parameters that will help Agency staff 
determine whether the applicant has sufficient control over the 
proposal to make the proposal subject to the requirements of NEPA and 
other applicable environmental requirements. Currently, Sec.  1970.8 
reiterates what is stated in Sec.  1794.20 in that actions for which 
the applicant has less than 5 percent ownership control are not 
considered federal actions subject to this part. The agency determined 
that an inconsistency existed in Sec.  1794.21(b)(17) in that a 5 
percent or less ownership control was classified as a CE. The 
requirements in this proposed section are also similar to those in 
existing Sec.  1794.3 and three sections in 7 CR part 1940, subpart G: 
Sec. Sec.  1940.301(h), 1940.311, and 1940.312.
    Section 1970.8(b)(2)(ii) provides that all Loan-servicing actions, 
including all consents or approvals given by an Agency, are major 
Federal actions. The consents and approvals of an Agency to be deemed 
major Federal actions would include, but not be limited to, consents 
and approvals given in connection with an entity that has previously 
received Agency funding and is required to seek Agency consent or 
approval under its existing agreements with the Agency as a 
prerequisite to receiving funding from another source. Under existing 
Sec.  1794.3, RUS's approvals were deemed not to be major Federal 
actions by RUS. However, in order to have a more consistent analytical 
approach among agencies within USDA, under the proposed rule all Agency 
consents and approvals, including all consents and approvals given by 
RUS, will be deemed to be major Federal actions. Although an Agency's 
loan-servicing actions are deemed major Federal actions under Sec.  
1970.8(b)(2), the proposed rule provides that an Agency's loan-
servicing actions may be classified as a CE under Sec.  1970.53(a)(5).
    This proposed section also recognizes the need to address certain 
major Federal actions that occur outside the borders of the United 
States, and identifies the geographic locations where NEPA and other 
applicable environmental requirements apply. NEPA applies not only to 
actions proposed within the United States, but also to actions proposed 
in any other commonwealth, territory, or possession of the U.S. such as 
Guam, Federated States of Micronesia, Republics of the Marshall Islands 
and of Palau, U.S. Virgin Islands, Commonwealth of the Northern Mariana 
Islands, and Puerto Rico. The Republic of Marshall Islands, the 
Federated States of Micronesia, and the Republic of Palau, in 
particular, are subject to Compacts of Free Association with the U.S. 
These compacts are Federal laws and specify that NEPA is generally 
applicable to major Federal actions that are proposed within those 
countries. See http://www.usa.gov/Agencies/State_and_Territories.shtml. This proposed section has been added to clarify 
NEPA's geographic

[[Page 6748]]

applicability outside of the U.S. to territories or associated states 
of the U.S.
Levels of Environmental Review (Sec.  1970.9)
    This proposed section identifies three classes of actions and the 
related levels of environmental review for applicant proposals and 
Agency actions. The proposed section also requires applicants to 
describe their proposals in sufficient detail such that the Agency can 
properly determine the required level of review. The determination of 
the level of environmental review is not itself an action that requires 
NEPA review.
    While the proposed section has no analogous sections in either 7 
CFR parts 1794 or 1940, subpart G, information relating to the three 
levels of review is included in separate sections on CEs, EAs, and EISs 
(Sec. Sec.  1970.310 through 1940.313--CEs, Class I and Class II EAs, 
and EISs, respectively; and Sec. Sec.  1794.21 through 1794.25--CEs 
with and without Environmental Report, EAs with and without scoping, 
and EISs, respectively).
    This proposed section was added (1) to consolidate information 
regarding the three levels of review and to make that information 
consistent with the CEQ regulations; (2) to describe the content and 
organization of the Agency's environmental policies and procedures; (3) 
to recognize that all aspects of a proposed action and proposals that 
are related to each other in such a way as to be a single course of 
action (connected actions) must be evaluated in a single environmental 
document (e.g., an Environmental Questionnaire, an EA, or an EIS), and 
(4) to address multi-year Telecommunication Program Loan/System Designs 
and multi-year Electric Program Construction Work Plans.
Raising the Level of Environmental Review (Sec.  1970.10)
    This proposed section identifies the conditions that could trigger 
the need for a higher level of review than that classified in subparts 
B (CE) or C (EA) of the proposed rule. These conditions include site-
specific environmental conditions or scientific controversy. In such 
situations, the Agency will determine whether extraordinary 
circumstances, as defined in Sec.  1970.52, or the potential for 
significant environmental impacts warrant a higher level of review 
(e.g., a CE action would be raised to the level of an EA review, or an 
EA action would be raised to the level of an EIS review).
    There are no analogous sections in 7 CFR parts 1940, subpart G, or 
1794. While Sec.  1940.319(g) acknowledges the potential for 
controversy and describes how environmental controversy should be 
addressed, it requires completion of a Class II EA in such 
circumstances. As has been noted previously, the distinction between 
Class I and Class II EAs in 7 CFR part 1940 has been eliminated. 
However, this proposed section makes it clear that an action that may 
be a Class I EA under the existing 7 CFR part 1940, subpart G, and that 
is now proposed to be a CE could require the preparation of an EA (or 
an EIS) if there are extraordinary circumstances related to the 
proposal (e.g., presence of sensitive resources or scientific 
controversy). The Agency is solely responsible for making this 
determination.
Timing of the Environmental Review Process (Sec.  1970.11)
    The requirements in this proposed section are similar to Sec. Sec.  
1940.315, 1794.11, 1794.44, 1794.64, and 1794.73. Information relating 
to timing, previously contained in multiple sections in 7 CFR part 
1794, based on the level of environmental review, is proposed for 
consolidation into this proposed section. Much of the detail in 7 CFR 
part 1940 relating to the Agency pre-application process and associated 
forms are proposed for elimination because those programs have been 
transferred to the FSA. This proposed section has also been revised to 
make it clear that the obligation of funds is directly tied to the 
conclusion of the environmental review process. It provides the 
specific steps that must be completed before the environmental review 
process is formally concluded.
    The Agency is also proposing to add a provision relating to third-
party contracting in this proposed section. Consistent with the CEQ 
regulations (40 CFR 1506.5(c)) and the practices of other agencies such 
as the U.S. Department of Energy (10 CFR 1021.215(d) and 1021.310) and 
the U.S. Environmental Protection Agency (40 CFR 6.303), the Agency is 
proposing to require applicants to solicit and procure professional 
services of third-party contractors to assist in the preparation of an 
EIS. The third-party contracting process is addressed in proposed Sec.  
1970.152, and the Agency's basis for this addition is described in 
Section V.C. below.
    Proposed Sec.  1970.11 makes it clear that the Agency is 
responsible for selecting a third-party EIS contractor and that 
applicants may not procure the services of any EIS contractor without 
approval by the Agency. This provision was added to ensure that the 
Agency would be in control of the preparation of an EIS.
Limitations on Actions During the NEPA Process (Sec.  1970.12)
    This proposed section provides that applicants may not take actions 
concerning a proposal that may have an environmental impact or that 
would limit or affect the Agency's decision until the Agency's review 
process has been concluded. The requirements in this proposed section 
are consistent with CEQ regulations (40 CFR 1506.1) and similar to the 
existing regulations at Sec. Sec.  1940.309(e) (relating to 
responsibilities of the applicant) and 1794.15 (Limitations on actions 
during the EIS process).
    The proposed section allows the Agency to deny financial assistance 
where an applicant has been found to have engaged in anticipatory 
demolition as that term is used in the NHPA (Section 110(k)) referring 
to a historic property that may be purposefully destroyed or 
irreparably harmed. It also includes a provision regarding ongoing 
construction activities. Occasionally, applicants have applied for 
Agency financial assistance on a project after construction has 
started. Examples include when funding from another source has been 
withdrawn or the applicant incurs a cost overrun before construction is 
complete. The Agency has put in place stringent requirements to assure 
that the applicant is not attempting to avoid environmental compliance 
requirements. The proposed section describes the requirements that 
would apply in these types of circumstances.
    Finally, this proposed section includes a discussion of when an 
applicant, with the prior written consent of the Agency, may make 
minimal expenditures in furtherance of a proposal prior to the 
completion of the NEPA process. This section is similar to that found 
in Sec.  1794.15 (there is no analogous discussion in 7 CFR part 1940, 
subpart G). The proposed section is consistent with the CEQ regulations 
(40 CFR 1506.1(d)), which specifically allow for RUS (as successor to 
the Rural Electrification Administration (REA)) ``approval of minimal 
expenditures not affecting the environment (e.g., long leadtime 
equipment and purchase options) made by non-governmental entities 
seeking loans from [RUS].'' A specific reference to this CEQ provision 
is included in the proposed rule.
Consideration of Alternatives (Sec.  1970.13)
    This proposed section provides that the Agency should consider all

[[Page 6749]]

reasonable alternatives when conducting a NEPA analysis. The Agency 
will also consider technical and economic feasibility when determining 
whether an alternative is reasonable. It also requires evaluation of 
the ``No Action'' alternative, at a minimum, for proposals subject to 7 
CFR part 1970, subpart C (EAs). For proposals subject to 7 CFR part 
1970, subpart D (EISs), the requirements of 40 CFR 1502.14 
(Alternatives Including the Proposed Action) must be followed with 
respect to evaluation of reasonable alternatives.
    This proposed section also recognizes that the level of analysis of 
alternatives will depend on the nature and complexity of the proposal. 
For example, an EA for a small project with limited potential 
environmental impacts is likely to need a less robust alternatives 
analysis than an EA or an EIS for a multi-faceted project with the 
potential for large impacts to sensitive resources. In some cases, 
analyzing only the proposed action and the No Action alternative may be 
appropriate.
    The requirements in this proposed section are similar to those in 
Sec.  1794.12. However, the factors the Agency will consider in 
determining whether an alternative is reasonable have been modified. 
The factors found in Sec.  1794.12, while potentially applicable, are 
more specific to RUS programs (e.g., size, scope, state of technology; 
legal and socioeconomic concerns; availability of resources; and 
timing). For that reason, the Agency proposes to state more generally 
that factors such as economic and technical feasibility will be taken 
into account in determining whether a particular alternative should be 
considered reasonable. Additional details or examples are more 
appropriate for and will be provided in staff instruction and/or 
applicant guidance.
    While there is no analogous section in 7 CFR part 1940, subpart G, 
existing Sec.  1940.312(g) and (h) define ``No Action'' and 
``practicable alternative,'' respectively. ``Practicable alternative'' 
is the term used in Executive Order 11988, Floodplain Management; the 
CEQ regulations require analysis of all ``reasonable'' alternatives (40 
CFR 1502.14). In the existing regulations, Sec.  1940.312(h) identifies 
three types of alternatives that must be analyzed to determine whether 
a ``practicable alternative'' exists, including alternative project 
sites or designs, projects with benefits similar to the proposed 
action, and the no action alternative. While these three types of 
alternatives are consistent with the range of ``reasonable'' 
alternatives that might be evaluated in an Agency EA or EIS, the 
modifier ``practicable'' is not used in this proposed rule in order to 
be consistent with the CEQ regulations.
Public Involvement (Sec.  1970.14)
    This proposed section describes how the Agency will meet its 
responsibility to involve the public including minority or low-income 
populations, and consult with other agencies. To accomplish this, the 
Agency will publish notices, conduct meetings, and use other means as 
necessary to inform the public regarding the proposed action and 
associated NEPA process. This section also describes the scoping 
process, including scoping meetings, agency responsibilities for 
notifying the public, making documents publicly available, and the 
handling of public comments.
    The requirements in this proposed section are similar to those 
currently found in Sec. Sec.  1940.331 and 1794.13. However, the 
proposed section includes several revisions. One important revision is 
the elimination of references to Class I and Class II EAs in 7 CFR part 
1940 and EAs with and without scoping in 7 CFR part 1794 as discussed 
previously. Accordingly, under the proposed section, scoping will be 
required for all EAs. This will fulfill the requirements and the spirit 
of NEPA as well as provide certainty to Agency staff, applicants, and 
other interested parties. While scoping is required for all EAs under 
the proposed section, the requirement for scoping meetings, previously 
identified for EAs with scoping under part 1794, is now at the Agency's 
discretion.
    The proposed rule also requires public review of EAs. This 
provision is consistent with the requirements of 7 CFR part 1794, but 
represents a change from 7 CFR part 1940, which specifies no formal 
public involvement process for EAs. The section has also been updated 
to identify other appropriate methods of public involvement such as 
posting information on the Internet or using other electronic media.
    The proposed section specifies the role of applicants in supporting 
the Agency's public involvement activities, including outreach to 
minority or low income populations and participation in consultation 
with Federal, state and local agencies; Federally recognized American 
Indian tribes and Alaska Native organizations; Native Hawaiian 
organizations; and interested parties. To assist Agency staff in 
reaching a wider and more diverse public, the proposed rule requires 
greater applicant support for outreach efforts than is described in the 
existing regulations. However, as a practical matter, Agency staff 
currently seeks and receives such support from applicants on an 
informal basis. The proposed rule would codify this practice. 
Additional information on scoping is provided in proposed Sec.  
1970.153, Notice of Intent and Scoping.
Interagency Cooperation (Sec.  1970.15)
    This proposed section provides that the Agency will, when 
practicable, eliminate duplication of Federal, State, and local 
procedures by coordinating with other Federal agencies; adopting 
appropriate environmental documents prepared for or by other Federal 
agencies; cooperating with State and local governments, such as in the 
preparation of joint documents prepared under a given State 
Environmental Policy Act (SEPA); and incorporating other environmental 
documents by reference or adopting other documents in accordance with 
40 CFR 1502.21 and 1506.3.
    The requirements in this proposed section consolidate information 
previously found in multiple sections within the existing regulations, 
including Sec. Sec.  1794.71, 1794.72, 1794.74, 1940.324 through 
1940.329, and 1940.334. With respect to the sections currently found in 
7 CFR part 1940, much of the detail relating to responsibilities as a 
lead and cooperating agency, incorporation by reference, and compliance 
with SEPAs has been eliminated, although the general requirements have 
been retained. The detailed information regarding compliance procedures 
is more appropriate for and will be included in staff instruction and/
or applicant guidance.
Mitigation (Sec.  1970.16)
    This proposed section consolidates information in the existing 
regulations pertaining to mitigation, and specifically addresses the 
monitoring of mitigation commitments. It also requires that all 
mitigation measures be included in Agency commitment and decision 
documents. The requirements in this proposed section are consistent 
with those in the existing Sec.  1794.17. Although there is no 
analogous section in 7 CFR part 1940, subpart G, mitigation is defined 
in Sec.  1940.302(f)), mitigation measures are discussed as part of 
Class II EAs in Sec.  1940.318, and monitoring is the subject of Sec.  
1940.330. In practice, the Agency has typically considered and imposed 
mitigation measures where appropriate. Accordingly, the Agency is 
proposing to codify its ongoing commitment to mitigation and to 
mitigation monitoring in particular in this proposed rule.

[[Page 6750]]

Programmatic Analyses and Tiering (Sec.  1970.17)
    This proposed section requires the Agency to consider preparing 
programmatic level environmental impact analyses for new programs or 
major changes to programs if better decision making will be fostered, 
or tiering if it would result in a reduction in delay and paperwork in 
accordance with 40 CFR 1502.20. As described in the CEQ regulations, a 
programmatic NEPA document refers to a broad-scope EIS or EA that 
identifies and assesses the environmental impacts of an agency program. 
Tiering, as defined in 40 CFR 1508.28, refers to the coverage of 
general matters in a broader EIS (policy or national programs) with 
subsequent narrower statements or environmental analyses incorporating 
by reference the general discussions and concentrating solely on issues 
specific to the statement subsequently prepared. Agencies are 
encouraged to tier their EISs to eliminate repetitive discussion of the 
same issues and focus on issues ripe for decision at each level of the 
environmental review (40 CFR 1502.20).
    The requirements in this proposed section are consistent with the 
existing Sec.  Sec.  1940.327 and 1794.16 related to tiering. However, 
information has been added to clarify for applicants when the Agency 
would consider the preparation of a programmatic analysis.
Emergencies (Sec.  1970.18)
    This proposed section provides that when an emergency exists and 
the Agency determines that it is necessary to take urgently needed 
actions, the Agency may take actions necessary to control the immediate 
impacts of the emergency before preparing an environmental impact 
analysis and any required documentation. ``Emergency actions'' are 
defined in the proposed rule as those actions that are urgently needed 
to return damaged facilities to service and to mitigate harm to life, 
property, or important natural or cultural resources.
    The requirements in this proposed section are similar to the 
existing Sec.  1940.332. However, the proposed rule distinguishes among 
an urgent response, a CE or EA level action, and an EIS level action. 
It also eliminates the distinction between Class I and Class II EAs 
found in the existing regulations for reasons discussed above, and 
includes a definition of emergency action. There is no analogous 
section in 7 CFR part 1794. In accordance with 40 CFR 1506.11, if 
emergency circumstances make it necessary to take an action for an EIS 
level action, the Agency will contact CEQ about alternative 
arrangements.

B. Subpart B--Categorical Exclusions

Applying CEs (Sec.  1970.51)
    This proposed section provides that the actions listed in 
Sec. Sec.  1970.53 through 1970.55 are classes of actions that the 
Agency has determined do not normally individually or cumulatively have 
a significant effect on the environment. For an action to meet the 
requirements of a categorical exclusion: (1) An action must fit within 
the classes of actions listed in Sec. Sec.  1970.53 through 1970.55; 
(2) there must be no extraordinary circumstances related to the 
proposal; and (3) the proposal must not be connected to other actions 
with potentially significant impacts.
    The proposed regulation states that most of the CEs listed apply to 
any program of the Agency; only a few apply to a particular program 
because the specified activity occurs only under that program. In 
addition, a proposed action that consists of one or more components may 
be categorically excluded only if all components of the proposed action 
are eligible for a CE. For example, a proposal to rehabilitate an 
existing structure (Sec.  1970.53(c)(2)) and install a small solar 
electric project (Sec.  1970.53(d)(5)) could be categorically excluded 
because both components of the proposed action fall within a proposed 
CE.
    Failure to comply with 7 CFR part 1970, subpart B will postpone 
further consideration of an applicant's proposal until such compliance 
is achieved or the applicant withdraws the proposal. If compliance is 
not achieved, the Agency will deny the request for financial 
assistance.
    The requirements in the proposed section are similar to the 
existing Sec. Sec.  1940.310(a) through (d) and 1940.317, and expand on 
Sec. Sec.  1794.30 and 1794.31, which make a general reference to RUS 
CEs and their classification. The reference and discussion relating to 
connected actions is new, and has been added to the proposed rule to be 
consistent with the CEQ NEPA regulations (40 CFR 1508.18).
Extraordinary Circumstances (Sec.  1970.52)
    This proposed section defines extraordinary circumstances as unique 
situations presented by specific proposals, such as characteristics of 
the geographic area affected by the proposal, scientific controversy 
about the environmental effects of the proposal, uncertain effects or 
effects involving unique or unknown risks, and unresolved conflicts 
concerning alternate uses of available resources within the meaning of 
Sec.  102(2)(E) of NEPA. The section provides examples of what the 
Agency considers to be extraordinary circumstances. In the presence of 
extraordinary circumstances, an action that may fall within the 
definition of a CE will be the subject of an EA or an EIS prepared in 
accordance with, 7 CFR part 1970, subparts C and D.
    The proposed section is similar to the existing 7 CFR 1940.310(a) 
and 1940.317(e), except that Sec.  1940.317(e)(9), (10), and (11) 
relating to important farmland, prime forest lands, and prime 
rangelands are no longer listed as extraordinary circumstances. In 
accordance with the Farmland Protection Policy Act, however, actions 
that propose to convert important farmland to nonagricultural lands are 
still required to evaluate other practicable alternatives. In addition, 
the provisions in Sec.  1940.311(d)(1) requiring the preparation of an 
EA for a proposal involving environmental controversy has been added to 
proposed Sec.  1970.52.
    The listing of extraordinary circumstances has also been expanded 
from 7 CFR part 1940 to include three new situations: (1) Any violation 
of applicable Federal, state, or local statutory, regulatory, permit, 
or Executive order requirements for environment, safety, and health; 
(2) certain activities relating to the management of Resource 
Conservation and Recovery Act regulated wastes; and (3) any proposal 
likely to cause uncontrolled or unpermitted releases of hazardous 
substances, pollutants, contaminants, or petroleum and natural gas 
products. While the Agency has considered these circumstances in 
practice, the Agency determined that they should be included in the 
formal rule.
    There is no analogous section in 7 CFR part 1794, although 
``extraordinary circumstances'' are referenced in Sec. Sec.  1794.21 
and 1794.30.
CEs Involving No or Minimal Construction (Sec.  1970.53)
    The Agency has determined, based on experience, that the potential 
for actions to have significant impacts on the human environment is 
generally avoided when the action: (1) Includes no construction or no 
significant alteration of ambient conditions (including air and water 
emissions); (2) takes place within a previously disturbed or previously 
developed area; or (3) would be small-scale in nature with only 
localized impacts in an area that is limited in size based on a 
specific

[[Page 6751]]

threshold(s) (e.g., acreage) set by the Agency. The use and meaning of 
certain qualifying provisions, such as small-scale, are discussed in 
Section IV.
    The CEs in this proposed section are for proposals that involve no 
or minimal alterations in the physical environment and typically occur 
on previously disturbed or developed land. They include routine 
financial actions, information gathering activities, and modifications 
to existing facilities. It is the Agency's view that the CEs in this 
proposed section typically do not involve extraordinary circumstances 
and have not resulted in significant environmental impacts in the past. 
For these reasons, applicants will not normally be required to provide 
environmental documentation on the proposed actions included in this 
section beyond the project description that is part of any application. 
However, the Agency may request additional environmental documentation 
from the applicant if the Agency determines that additional information 
is needed for the Agency to determine the appropriate level of NEPA 
review.
    Most of the CEs in proposed Sec.  1970.53 are the same as those 
currently found in the RHS/RBS and RUS regulations; a few new CEs are 
also proposed. Table 1 lists all of the proposed CEs in Sec.  1970.53 
and indicates whether they were derived from existing Agency CEs (and 
if so, where) or whether they are new. Table 1 also lists relevant 
Class I EAs, now classified as CEs (see Section V.C for additional 
detail).
    The explanation and justification for proposing the new CEs in 
Sec.  1970.53 is provided in Table 2. Some of the proposed new CEs are 
based on Agency experience in preparing EAs that have always resulted 
in FONSIs for these or similar types of proposals; some proposed CEs 
are based on a CE promulgated by another Federal agency for a similar 
type of proposal. As noted in Section IV, the adoption of CEs 
promulgated by other agencies is encouraged by the CEQ CE Guidance (75 
FR 75628 (2010)).
    Some RHS/RBS CE actions are not included in the proposed rule. Such 
actions are not included because they are administered by FSA and not 
eligible for Agency funding or they are included in proposed Sec.  
1970.53. These are:
    Sec.  1940.310(d)(1) Financial assistance for the purchase of an 
existing farm, or an enlargement to one, provided no shifts in land use 
are proposed beyond the limits stated in paragraphs (d)(10) and (11) of 
this section;
    Sec.  1940.310(d)(2) Financial assistance for the purchase of 
livestock and essential farm equipment, including crop storing and 
drying equipment, provided such equipment is not to be used to 
accommodate shifts in land use beyond the limits stated in paragraphs 
(d)(10) and (11) of this section;
    Sec.  1940.310(d)(3) Financial assistance for (i) the payment of 
annual operating expenses, which does not cover activities specifically 
addressed in this section or Sec. Sec.  1940.311 or 1940.312 of this 
subpart; (ii) family living expenses; and (iii) refinancing debts;
    Sec.  1940.310(d)(4) Financial assistance for the construction of 
essential farm dwellings and service buildings of modest design and 
cost, as well as repairs and improvements to them;
    Sec.  1940.310(d)(5) Financial assistance for onsite water supply 
facilities to serve a farm dwelling, farm buildings, and livestock 
needs;
    Sec.  1940.310(d)(6) Financial assistance for the installation or 
enlargement of irrigation facilities, including storage reservoirs, 
diversion dams, wells, pumping plants, canals, pipelines, and 
sprinklers, designed to irrigate less than 80 acres, provided that 
neither a State water quality standard, a property listed or 
potentially eligible for listing on the National Register of Historic 
Places, a river or portion of a river included in, or designated for, 
potential addition to the Wild and Scenic Rivers System, nor a wetland 
is affected. If a wetland is affected, the application will fall under 
Class II as defined in Sec.  1940.312 of this subpart. Potential 
effects to a water quality standard, an historic property or the Wild 
and Scenic Rivers System require that a review be initiated under a 
Class I assessment as specified in Sec.  1940.317(g) of this subpart.
    Sec.  1940.310(d)(7) Financial assistance that solely involves the 
replacement or restoration of irrigation facilities, to include those 
facilities described in paragraph (d)(6) of this section, with minimal 
change in use, size, capacity, or location from the original 
facility(s) provided that neither a State water quality standard, a 
property listed or potentially eligible for listing on the National 
Register of Historic Places, a river or portion of a river included in 
or designated for potential addition to the Wild and Scenic Rivers 
System, nor a wetland is affected. If a wetland is affected, the 
application will fall under Class II as defined in Sec.  1940.312 of 
this subpart. Potential effects to a water quality standard, an 
historic property, or the Wild and Scenic Rivers System require that a 
Class I assessment be completed as specified in Sec.  1940.317(g) of 
this subpart. Also, to qualify for this exclusion, the facilities to be 
replaced or restored must have been used for similar irrigation 
purposes at least two out of the last three consecutive growing 
seasons. Otherwise, the action will be viewed as an installation of 
irrigation facilities.
    Sec.  1940.310(d)(8) Financial assistance for the development of 
farm ponds or lakes of no more than 5 acres in size, provided that, 
neither a State water quality standard, a property listed or 
potentially eligible for listing on the National Register of Historic 
Places, a river or portion of a river included in or designated for 
potential addition to the Wild and Scenic Rivers System, nor a wetland 
is affected. If a wetland is affected, the application will fall under 
Class II as defined in Sec.  1940.312 of this subpart. Potential 
effects to a water quality standard, an historic property, or the Wild 
and Scenic Rivers System require that a review be initiated under a 
Class I assessment as specified in Sec.  1940.317(g) of this subpart;
    Sec.  1940.310(d)(9) Financial assistance for the conversion of (i) 
land in agricultural production to pastures or forests, or (ii) 
pastures to forests;
    Sec.  1940.310(d)(10) Financial assistance for land-clearing 
operations of no more than 15 acres, provided no wetlands are affected, 
and financial assistance for any amount of land involved in tree 
harvesting conducted on a sustained yield basis and according to a 
Federal, State or other governmental unit approved forestry management 
and marketing plan; and
    Sec.  1940.310(d)(11) Financial assistance for the conversion of no 
more than 160 acres of pasture to agricultural production, provided 
that in a conversion to agricultural production no State water quality 
standard or wetlands are affected. If a wetland is affected, the 
application will fall under Class II as defined in Sec.  1940.312 of 
this subpart. If a water quality standard would be impaired or 
antidegradation requirement not met, a Class I assessment is required 
as specified in Sec.  1940.317(g) of this subpart.

[[Page 6752]]



 Table 1--Sources for Proposed Categorical Exclusions in Sec.   1970.53
------------------------------------------------------------------------
                                    Source: RHS/RBS       Source: RUS
 Proposed categorical exclusions  regulations (7 CFR  regulations (7 CFR
         7 CFR part 1970             part 1940-G)         part 1794)
------------------------------------------------------------------------
      Sec.   1970.53 Categorical Exclusions Involving No or Minimal
                              Construction
                       (no documentation required)
------------------------------------------------------------------------
               Sec.   1970.53(a) Routine Financial Actions
------------------------------------------------------------------------
Sec.   1970.53(a)(1) Refinancing  Sec.
 of debt.                          1940.310(c)(1).
                                  Sec.
                                   1940.310(d)(3)..
Sec.   1970.53(a)(2) Purchase,    Sec.                Sec.
 transfer, lease or other          1940.310(b)(1).     1794.21(b)(1).
 acquisition of real property     Sec.                Sec.
 with no or minimal change in      1940.310(b)(9).     1794.22(b)(7).
 use.                             Sec.
                                   1940.310(c)(1)..
                                  Sec.
                                   1940.310(c)(2)..
                                  Sec.
                                   1940.310(d)(1)..
Sec.   1970.53(a)(3) Purchase,    Sec.                Sec.
 transfer or lease of personal     1940.310(c)(1).     1794.21(b)(1).
 property or fixtures with no or  Sec.                Sec.
 minimal change in operations.     1940.310(c)(5).     1794.21(b)(13).
                                  Sec.                Sec.
                                   1940.310(d)(2).     1794.21(c)(2).
Sec.   1970.53(a)(4) Financial    Sec.
 assistance for operating          1940.310(c)(1).
 (working) capital for an         Sec.
 existing operation to support     1940.310(d)(3)..
 day-to-day expenses.
Sec.   1970.53(a)(5) Actions      Sec.                Sec.
 taken by Agency after provision   1940.310(e)(2).     1794.21(b)(2).
 of financial assistance          Class I EAs: Sec.   Sec.
 involving no or minimal            1940.311(d)(2)     1794.21(c)(4).
 construction or change in         and Sec.
 operations.                       1940.311(d)(3)..
Sec.   1970.53(a)(6) Rural        1940.310(c)(7)....
 Business Investment Program
 Actions.
                                 ---------------------------------------
Sec.   1970.53(a)(7) Guaranteed            New CE. See Table 2.
 underwriting loans.
------------------------------------------------------------------------
    Sec.   1970.53(b) Information Gathering and Technical Assistance
------------------------------------------------------------------------
Sec.   1970.53(b)(1) Information  Sec.                Sec.
 gathering, data analysis,         1940.310(e)(1).     1794.21(a)(1).
 document preparation, and        Sec.                Sec.
 information dissemination.        1940.310(b)(10).    1794.21(b)(11).
                                                      Sec.
                                                       1794.21(c)(3).
Sec.   1970.53(b)(2) Technical    Sec.                Sec.
 advice, training, planning        1940.310(b)(4).     1794.21(c)(3).
 assistance and capacity          Sec.
 building.                         1940.310(b)(6)..
                                  Sec.
                                   1940.310(c)(4)..
                                  Sec.
                                   1940.310(e)(1)..
Sec.   1970.53(b)(3) Site         Sec.                Sec.
 characterization, environmental   1940.310(e)(1).     1794.21(b)(10).
 testing, and monitoring with no                      Sec.
 significant alteration of                             1794.21(b)(11).
 existing ambient conditions.
------------------------------------------------------------------------
    Sec.   1970.53(c) Small-Scale Construction and Minor Modification
                                Proposals
------------------------------------------------------------------------
Sec.   1970.53(c)(1) Minor        Sec.                Sec.
 modifications or revisions to     1940.310(c)(6).     1794.21(c)(4).
 previously approved projects     Class I EA: Sec.
 where such activities do not      1940.311(d)(2)..
 significantly alter the
 purpose, operation, location,
 or design of the project as
 originally approved.
Sec.   1970.53(c)(2) Repair,      Sec.                Sec.
 upgrade, or replacement of        1940.310(b)(3).     1794.21(a)(4).
 equipment or fixtures in         Sec.                Sec.
 existing structures to improve    1940.310(b)(7).     1794.21(b)(20).
 habitability, increase energy    Sec.                Sec.
 efficiency, or reduce pollution.  1940.310(c)(2).     1794.21(b)(22).
                                  Sec.
                                   1940.310(d)(4)..
Sec.   1970.53(c)(3) Any          Sec.                Sec.
 internal modification or          1940.310(b)(3).     1794.21(b)(3).
 minimal external modification,   Sec.                Sec.
 restoration, renovation,          1940.310(b)(7).     1794.21(b)(5).
 maintenance and replacement in-  Sec.                Sec.
 kind to an existing facility or   1940.310(c)(2).     1794.21(b)(6).
 structure.                                           Sec.
                                                       1794.21(b)(7).
                                                      Sec.
                                                       1794.21(b)(9).
                                                      Sec.
                                                       1794.22(b)(1).
Sec.   1970.53(c)(4)              Sec.
 Construction of or improvements   1940.310(b)(1).
 to a single-family dwelling or   Sec.
 a multi-family housing project    1940.310(b)(3)..
 serving up to four families,     Sec.
 except when financing is          1940.310(b)(7)..
 provided through a Rural         Sec.
 Housing Site Loan.                1940.310(b)(8)..
Sec.   1970.53(c)(5) Siting,      Sec.                Sec.
 construction, and operation of    1940.310(d)(5).     1794.21(b)(23).
 new or additional water supply                       Sec.
 wells for residential, farm, or                       1794.22(b)(5) EA:
 livestock use.                                        Sec.
                                                       1794.22(c)(1).
Sec.   1970.53(c)(6)              ..................  Sec.
 Modifications of an existing                          1794.21(b)(23).
 water supply well to restore
 production in existing water
 well fields where there would
 be no drawdown other than in
 the immediate vicinity of the
 pumping well, no resulting long-
 term decline of the water
 table, and no degradation of
 the aquifer from the new or
 replacement well.
Sec.   1970.53(c)(7) New utility  ..................  Sec.
 service connections to                                1794.21(b)(16).
 individual users or
 construction of utility lines
 or associated components where
 the applicant has no control
 over the placement of the
 utility facilities.
Sec.   1970.53(c)(8) Conversion   Sec.
 of land in agricultural           1940.310(d)(9).
 production to pastureland or
 forests, or conversion of
 pastureland to forest.
Sec.   1970.53(c)(9) Land-        Sec.
 clearing operations of no more    1940.310(d)(10).
 than 15 acres.

[[Page 6753]]

 
Sec.   1970.53(c)(10) Conversion  Sec.
 of no more than 160 acres of      1940.310(d)(11).
 pastureland to agricultural
 production..
------------------------------------------------------------------------
     Sec.   1970.53(d) Small Energy or Telecommunications Proposals
------------------------------------------------------------------------
Sec.   1970.53(d)(1) Changes to   ..................  Sec.
 existing telecommunication                            1794.22(a)(5).
 facilities or electric
 distribution and transmission
 lines that involve pole
 replacement or structural
 components where either the
 same or substantially
 equivalent support structures
 at the approximate existing
 support structure location are
 used.
Sec.   1970.53(d)(2) Phase or     ..................  Sec.
 voltage conversions,                                  1794.21(b)(15).
 reconductoring, or upgrading of
 existing electric distribution
 lines or telecommunication
 facilities.
                                 ---------------------------------------
Sec.   1970.53(d)(3) Addition of           New CE. See Table 2.
 telecommunication cables and
 related facilities to electric
 transmission and distribution
 structures.
Sec.   1970.53(d)(4) Siting,               New CE. See Table 2.
 construction, and operation of
 small ground source heat pump
 systems that would be located
 in previously disturbed land.
Sec.   1970.53(d)(5) Siting,               New CE. See Table 2.
 construction, and operation of
 small solar electric projects
 or solar thermal projects to be
 installed on an existing
 structure with no expansion of
 the footprints of the existing
 structure.
Sec.   1970.53(d)(6) Siting,       New CE. See Table 2. Class I EA: Sec.
 construction, and operation of                1940.311(c)(4).
 small biomass projects that
 would use feedstock produced on
 site and supply gas or
 electricity for the site's own
 energy needs.
                                 ---------------------------------------
Sec.   1970.53(d)(7)              ..................  Sec.
 Construction of small (one                            1794.21(b)(21).
 megawatt or less) standby
 electric generating facilities
 and associated facilities for
 the purpose of providing
 emergency power for or startup
 of an existing facility.
Sec.   1970.53(d)(8) Additions    ..................  Sec.
 or modifications to electric                          1794.21(b)(7).
 power transmission facilities
 that would not affect the
 environment beyond the
 previously developed facility
 area including, but not limited
 to, switchyard rock grounding
 upgrades, secondary containment
 projects, paving projects,
 seismic upgrading, tower
 modifications, changing
 insulators, and replacement of
 poles, circuit breakers,
 conductors, transformers, and
 crossarms.
Sec.   1970.53(d)(9) Safety,      ..................  Sec.
 environmental, or energy                              1794.21(b)(20).
 efficiency improvements within                       Sec.
 an existing electric generation                       1794.21(b)(24).
 facility, including addition,
 replacement, or upgrade of
 facility components (such as
 precipitator, baghouse, or
 scrubber installations) that do
 not result in a change to the
 design capacity or function of
 the facility and do not result
 in an increase in pollutant
 emissions, effluent discharges,
 or waste products.
------------------------------------------------------------------------
        Sec.   1970.53(e) Promulgation of Rules or Formal Notices
------------------------------------------------------------------------
Sec.   1970.53(e) Promulgation    Sec.
 of Rules or Formal Notices.       1940.310(e)(3).
------------------------------------------------------------------------
           Sec.   1970.53(f) Agency Proposals for Legislation
------------------------------------------------------------------------
Sec.   1970.53(f) Agency                   New CE. See Table 2.
 Proposals for Legislation.
------------------------------------------------------------------------
                Sec.   1970.53(g) Administrative Actions
------------------------------------------------------------------------
Sec.   1970.53(g) Administrative  Sec.                Sec.
 Actions.                          1940.310(e)(4).     1794.21(a)(2).
                                  Sec.                Sec.
                                   1940.310(e)(5).     1794.21(a)(3).
------------------------------------------------------------------------


[[Page 6754]]


Table 2--Explanation for New Proposed Categorical Exclusions in Proposed
                             Sec.   1970.53
------------------------------------------------------------------------
  New proposed categorical exclusion 7
             CFR part 1970                         Explanation
------------------------------------------------------------------------
Sec.   1970.53(a)(7) Guaranteed          Under Section 313A of the Rural
 underwriting loans pursuant to Section   Electrification Act the Agency
 313A of the Rural Electrification Act.   guarantees payments on bonds
                                          or notes issued by not-for-
                                          profit lenders to the Federal
                                          Financing Bank if the proceeds
                                          are used to make loans for any
                                          telephone or electric
                                          purposes, other than electric
                                          generation, consistent with
                                          the Rural Electrification Act,
                                          or to refinance bonds and
                                          notes issued for such
                                          purposes. Section 313A
                                          guarantees are not issued for
                                          specific purposes, projects or
                                          utility providers. It has been
                                          the Agency's experience for
                                          several years that the
                                          proceeds of Section 313A
                                          guaranteed bonds and notes
                                          have been used to refinance
                                          outstanding bonds and notes
                                          that are general obligations
                                          of the not-for-profit lender
                                          that are not associated with
                                          specific projects. Based on
                                          its experiences with these
                                          transactions since 2005, the
                                          Agency has determined that
                                          these proposed routine
                                          financial actions will not
                                          individually or cumulatively
                                          have a significant impact on
                                          the environment.
Sec.   1970.53(d)(3) Addition of         The Agency is adopting a U.S.
 telecommunication cables and related     Department of Energy CE that
 facilities to electric transmission      addresses these types of
 and distribution structures.             activities (CE B4.7). The U.S.
                                          Department of Commerce also
                                          has a similar CE (CE A-6).
                                          Confirming the absence of
                                          extraordinary circumstances
                                          (such as threatened or
                                          endangered species), and based
                                          on its own experience, the
                                          Agency has determined that
                                          these proposed actions will
                                          not individually or
                                          cumulatively have a
                                          significant impact on the
                                          environment.
Sec.   1970.53(d)(4) Siting,             The Agency is adopting a U.S.
 construction, and operation of small     Department of Energy CE that
 ground source heat pump systems that     addresses these types of
 would utilize closed loops.              activities (CE B5.19).
                                          Confirming the absence of
                                          extraordinary circumstances
                                          (such as threatened or
                                          endangered species), and based
                                          on its own experience, the
                                          Agency has determined that
                                          these proposed actions will
                                          not individually or
                                          cumulatively have a
                                          significant impact on the
                                          environment.
Sec.   1970.53(d)(5) Siting,             These systems are small
 construction, and operation of small     (typically for single family
 solar electric projects or solar         housing or small businesses),
 thermal projects to be installed on an   promote the use of renewable
 existing structure with no expansion     energy, and typically disturb
 of the footprint of the existing         less than 0.25 acre.
 structure.                              Given the footprint
                                          restriction, confirming the
                                          absence of extraordinary
                                          circumstances (such as
                                          threatened or endangered
                                          species), and based on its own
                                          experience, the Agency has
                                          determined that these proposed
                                          actions will not individually
                                          or cumulatively have a
                                          significant impact on the
                                          environment.
Sec.   1970.53(d)(6) Siting,             These systems are small in size
 construction, and operation of small     and typically disturb less
 biomass projects that would use          than 0.25 acre. They are
 feedstock produced on site and supply    normally sited within an
 gas or electricity for the site's own    existing site such as a farm's
 energy needs.                            manure lagoon or other waste
                                          facility to convert bio-gas
                                          (usually methane) into
                                          electricity.
                                         Example actions include animal
                                          waste anaerobic digesters or
                                          gasifiers that would use
                                          feedstock produced on site
                                          (such as a farm where the site
                                          has been previously disturbed)
                                          and supply gas or electricity
                                          for the site's own energy
                                          needs with no or only
                                          incidental export of energy.
                                         Given the on-site restriction,
                                          confirming the absence of
                                          extraordinary circumstances
                                          (such as threatened or
                                          endangered species), and based
                                          on its own experience, the
                                          Agency has determined that
                                          these proposed actions will
                                          not individually or
                                          cumulatively have a
                                          significant impact on the
                                          environment.
Sec.   1970.53(f) Agency Proposals for   This CE applies only to
 Legislation.                             proposals for legislation that
                                          have no potential for
                                          significant impacts on the
                                          environment because they would
                                          allow for no or minimal
                                          construction or changes in
                                          operation.
------------------------------------------------------------------------

    As shown in Table 1, many CEs in Sec.  1970.53 are based on, and 
consistent with, CEs found in Sec.  1940.310, which has no applicant 
documentation requirements, and Sec.  1794.21, which does not require 
the submission of an environmental report. In a few instances, CEs 
found in Sec.  1794.22 (requiring an environmental report) or Class I 
EAs found in Sec.  1940.311, both with documentation requirements, are 
included in a proposed Sec.  1970.53 CE with no documentation 
requirements. In these instances, which are addressed in the relevant 
sections below, the documentation requirements would be reduced under 
the proposed rule.
    The following paragraphs describe each of the proposed CEs in Sec.  
1970.53.
Routine Financial Actions (Sec.  1970.53(a))
    The proposed CEs described in this paragraph apply to the following 
routine financial actions:
    (1) Refinancing of debt, provided that the applicant is not using 
refinancing as a means of avoiding compliance with the environmental 
requirements. This is a routine financial transaction that provides 
financial assistance to existing businesses or other entities to 
facilitate their continuing operations by reducing their debt payments. 
This proposed CE consolidates the scope of two existing RHS/RBS CEs 
(see Table 1). The provisions of the proposed CE are also similar to an 
existing CE promulgated by the U.S. Department of the Interior (DOI) 
relating to routine financial actions including guarantees, financial

[[Page 6755]]

assistance, income transfers, audits, fees, bonds, and royalties (43 
CFR 46.210(c)).
    (2) Financial assistance for the purchase, transfer, lease, or 
other acquisition of real property when no or minimal change in use is 
reasonably foreseeable. ``No or minimal change'' is defined in the 
proposed rule as meaning ``no or only a small change in use, capacity, 
purpose, operation, or design is expected where the foreseeable type 
and magnitude of impacts would remain essentially the same.'' The 
condition relating to minimal change in use is currently used in Sec.  
1940.310(c)(2). This is a routine financial transaction that normally 
has no potential for significant environmental impacts because there is 
no change to existing conditions. Because Rural Housing Site Loans 
involve subdivision development that would have the potential for 
significant environmental impacts, such loans are not eligible for this 
CE. Since these loans are typically for subdivision developments, the 
Agency believes new subdivision developments should be reviewed as an 
EA.
    This proposed CE consolidates the scope of seven existing Agency 
CEs (see Table 1). With respect to existing Sec.  1794.22(a)(11), which 
relates to the purchase of existing facilities or a portion thereof 
where the use or operation will remain unchanged, the requirement of a 
facility environmental audit in the existing CE is included as part of 
staff instruction (subpart J, Environmental Risk Management).
    The provisions of the proposed CE are also similar to CEs 
promulgated by the U.S. Department of Energy (DOE) (10 CFR part 1021, 
Appendix B to subpart D, B 1.24) and the U.S. Environmental Protection 
Agency (EPA) (40 CFR 6.204(a)(2)(vi)), which relate to the acquisition, 
transfer, lease, or disposition of interests in real property for 
reasonably foreseeable uses. By adopting these CEs, these agencies have 
similarly concluded that these types of actions do not result in 
significant environmental impacts.
    (3) Financial assistance for the purchase, transfer, or lease of 
personal property or fixtures involving no or minimal reasonably 
foreseeable changes in operations. The meaning of ``no or minimal 
change'' is the same as described under proposed Sec.  1970.53(a)(2).
    This proposed CE provides a list of actions that are included under 
this CE. This proposed CE also includes the approval of minimal 
expenditures such as contracts for long lead-time equipment and 
purchase options by applicants. This provision was not included in 7 
CFR part 1940-G, although it is consistent with Sec.  1794.15(b)(2) and 
CEQ regulations (40 CFR 1506.1(d)).
    This proposed CE consolidates six existing Agency CEs (see Table 
1). The Agency's implementation of these existing CEs has not resulted 
in the imposition of significant environmental impacts. The provisions 
of the proposed CE are also similar to existing CEs promulgated by DOE 
(10 CFR part 1021, Appendix B to subpart D, B 1.7 and B 1.24), EPA (40 
CFR 6.204(a)(2)(vi)), and the U.S. Department of Commerce (DOC) 
(Department Administrative Order 216-6, A-7 and A-9), which relate to 
the purchase of personal property such as communications and electronic 
equipment.
    (4) Financial assistance for operating (working) capital for an 
existing operation to support day-to-day expenses. This is a routine 
financial transaction that provides financial assistance to existing 
businesses for their continuing annual operating expenses. This 
proposed CE consolidates and simplifies the content of two existing 
RHS/RBS CEs (see Table 1). The Agency's implementation of these 
existing CEs has not resulted in the imposition of significant 
environmental impacts.
    (5) Actions by the Agency after provision of financial assistance 
when those actions have no potential for significant adverse 
environmental impact because the actions would involve no or minimal 
construction or change in operations, such as foreclosure or certain 
consents and approvals. These actions generally include routine loan 
servicing actions. This proposed CE consolidates three existing Agency 
CEs (see Table 1), as well as two Class I EAs that have been 
reclassified as CEs based on Agency experience (see also Section V.C).
    (6) Rural Business Investment Program actions. This CE is an 
existing provision under Sec.  1940.310(c)(7), which involves actions 
that relate to non-leveraged program actions such as licensing by USDA 
of rural investment entities and leveraged program actions unless such 
Federal assistance is used to finance construction or development of 
land.
    (7) Guaranteed underwriting loans issued by the Agency under 
Section 313A(a) of the Rural Electrification Act of 1936. This CE is 
new and is consistent with existing Agency practices but is presented 
separately for clarity. Under Section 313A of the Rural Electrification 
Act the Agency guarantees payments on bonds or notes issued to the 
Federal Financing Bank by not-for-profit lenders if the proceeds are 
used to make loans for any telephone or electric purposes, other than 
electric generation, consistent with the Rural Electrification Act, or 
to refinance bonds and notes issued for such purposes. Section 313A 
guarantees are not issued for specific purposes, projects or utility 
providers. It has been the Agency's experience for several years that 
the proceeds of Section 313A guaranteed bonds and notes have been used 
to refinance outstanding bonds and notes that were general obligations 
of the not-for-profit lender that were not underwritten for or 
associated with any specific projects. Based on its experiences with 
these transactions since 2002, the Agency has determined that these 
proposed routine financial actions will not individually or 
cumulatively have a significant impact on the environment.
Information Gathering and Technical Assistance (Sec.  1970.53(b))
    The following proposed CEs described in this paragraph apply to 
routine administrative or financial assistance actions:
    (1) Information gathering, data analysis, document preparation, and 
information dissemination. Some of the examples provided include 
research, literature surveys, computer modeling, conceptual design, 
feasibility studies, document distribution and classroom training. This 
proposed CE consolidates and clarifies five existing Agency CEs (see 
Table 1). While the proposed CE does not specifically address every 
activity found in the existing regulations (e.g., appraisals of nonfarm 
tracts and small farms for rural housing loans [Sec.  
1940.310(b)(10)]), it is the Agency's intent that such activities are 
included. The description of the information gathering activities in 
this proposed CE is intended to be general in nature and not limited to 
the examples provided. The provisions of the proposed CE are similar to 
existing CEs promulgated by DOI (43 CFR 46.210(e) and 46.210(j)), DOC 
(Department Administrative Order 216-6, A-3), and EPA (40 CFR 
6.204(a)(2)(iii)), which relate to data and information collection and 
dissemination, data analysis, and testing.
    (2) Technical advice, training, planning assistance and capacity 
building. This proposed CE expands on five existing Agency CEs (see 
Table 1) and incorporates the provisions of an existing CE promulgated 
by DOC (Department Administrative Order 216-6, A-8) which relates to 
classroom-based training and exercises using existing facilities. 
Similar to proposed

[[Page 6756]]

Sec.  1970.53(b)(1), the description is intended to be general and not 
limited to the examples given.
    (3) Site characterization, environmental testing, and monitoring 
where no significant alteration of existing conditions would occur. 
Example actions include air, surface water, groundwater, wind, soil, or 
rock core sampling; installation of monitoring wells; installation of 
small scale air, water, or weather monitoring equipment. This proposed 
CE expands on three existing Agency CEs (see Table 1) by incorporating 
provisions from existing CEs promulgated by DOE (10 CFR part 1021, 
Appendix B to subpart D, B 3.1), DOI (43 CFR 46.210(e)), and EPA (40 
CFR 6.204(a)(2)(iii)), which relate to information and data collection, 
inventory (including field study), site characterization, and 
environmental monitoring activities. Similar to proposed Sec.  
1970.53(b)(1), the description is intended to be general and not 
limited to the examples given.
Small-Scale Construction and Minor Modification Proposals (Sec.  
1970.53(c))
    The proposed CEs described in this paragraph apply to financial 
assistance for the following actions:
    (1) Minor modifications or revisions to previously approved 
projects provided such activities do not significantly alter the 
purpose, operation, location, or design of the project as originally 
approved. This proposed CE consolidates two existing Agency CEs (see 
Table 1), as well as a Class I EA that has been reclassified as a CE 
based on Agency experience (see also Section V.C).
    (2) Repair, upgrade, or replacement of equipment or fixtures in 
existing structures for such purposes as improving habitability, 
reconstruction, energy efficiency, or pollution prevention. These 
actions normally have no potential for significant environmental 
impacts and this CE has been modified to incorporate seven existing 
Agency CEs (see Table 1). The provisions of the proposed CE are also 
similar to existing CEs promulgated by DOE (10 CFR part 1021, Appendix 
B to subpart D, B 2.1, B 2.5, B 3.9(b), B 5.1, and B 6.3) and EPA (40 
CFR 6.204(a)(1)(i)), which relate to routine maintenance, workplace 
enhancements, and facility safety and environmental improvements to an 
existing facility such as reducing emissions and waste generation, and 
conserving energy.
    (3) Any internal modification or minimal external modification, 
restoration, renovation, maintenance and replacement in-kind to an 
existing facility or structure. These actions normally have no 
potential for significant environmental impacts. This proposed CE has 
been modified to incorporate nine existing Agency CEs (see Table 1). 
The provisions of the proposed CE are similar to an existing CE 
promulgated by DOC (Department Administrative Order 216-6, A-1,), which 
relates to minor renovations and additions to buildings, equipment, and 
grounds that do not result in a change to the functional use of the 
property.
    (4) Construction of or improvements to a single-family dwelling or 
a multi-family housing project serving up to four families, except when 
financing is provided through a Rural Housing Site Loan. Rural Housing 
Site Loans are typically for subdivision developments and the Agency 
believes new subdivision developments should be reviewed as an EA. 
However, it is the Agency's intent that this proposed CE include the 
financing of housing construction or the approval of lots in a 
previously approved Agency subdivision, as found in existing Sec.  
1940.310(b)(8). This is a routine financial transaction that the Agency 
has conducted extensively over the past 26 years and for which no 
significant adverse effects have resulted. This proposed CE has been 
modified to incorporate five existing RHS/RBS CEs (see Table 1).
    (5) Siting, construction, and operation of new or additional water 
supply wells for residential, farm, or livestock use. This is a routine 
financial transaction that normally has no potential for significant 
environmental impacts. This proposed CE has been modified to 
incorporate two existing Agency CEs (see Table 1). The provisions of 
the proposed CE are similar to an existing CE promulgated by DOE (10 
CFR part 1021, Appendix B to subpart D, B 1.18), which relates to the 
siting, construction, modification, and operation of water supply 
wells.
    (6) Modifications of an existing water supply well to restore 
production in existing water well fields, if there would be no drawdown 
other than in the immediate vicinity of the pumping well, no resulting 
long-term decline of the water table, and no degradation of the aquifer 
from the new or replacement well. This is a routine financial 
transaction that normally involves reviewing plans and information from 
State regulatory and permitting agencies and normally has no potential 
for significant environmental impacts. This proposed CE includes an 
existing RUS CE (see Table 1), and also incorporates provisions similar 
to a CE promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, 
B 1.18), which relates to the siting, construction, modification, and 
operation of water supply wells.
    (7) New utility service connections to individual users or 
construction of utility lines or associated components where the 
applicant has no control over the placement of the utility facilities. 
This proposed CE includes an existing RUS CE (see Table 1).
    (8) Conversion of land in agricultural production to pastureland or 
forests, or conversion of pastureland to forest. This is an action that 
normally has no potential for significant environmental impacts. This 
proposed CE includes an existing RHS/RBS CE (see Table 1).
    (9) Land-clearing operations of no more than 15 acres, provided any 
amount of land involved in tree harvesting is to be conducted on a 
sustainable basis and according to a Federal, State, or other 
governmental unit approved forestry management plan. This is an action 
that normally has no potential for significant environmental impacts. 
This proposed CE includes an existing RHS/RBS CE (see in Table 1).
Small Energy or Telecommunications Proposals (Sec.  1970.53(d))
    The proposed CEs described in this paragraph apply to financial 
assistance for the following actions:
    (1) Changes to existing telecommunication facilities or electric 
distribution and transmission lines that involve pole replacement or 
structural components only where either the same or substantially 
equivalent support structures at the approximate existing support 
structure location are used. This is a routine action that extracts a 
component of the existing 7 CFR 1794.22(a)(5) to encompass pole 
replacement which the Agency has determined, based on past experience, 
does not result in significant impact to environmental resources. The 
threshold reference in the existing regulation (i.e., less than 20 
percent pole replacement) was not included. Instead, the Agency added 
provisions that are similar to an existing CE promulgated by the Bureau 
of Land Management (BLM) (Department of the Interior Departmental 
Manual 516, Chapter 11, E 13), which relates to upgrading of existing 
facilities which involve no additional disturbances outside the right-
of-way boundary. Such provisions help ensure that there is no potential 
for significant impact.
    (2) Phase or voltage conversions, reconductoring, or upgrading of 
existing electric distribution lines or telecommunication facilities. 
This is routine action that normally has no potential for significant 
environmental

[[Page 6757]]

impacts and which includes an existing RUS CE (see Table 1). The 
provisions of the proposed CE are also similar to an existing CE 
promulgated by DOC (Department Administrative Order 216-6, A-5), which 
relates to upgrading of existing radio communication towers that do not 
require ground disturbance; and by BLM (Departmental Manual 516, 
Chapter 11, E-16), which relates to acquisition of easements for an 
existing road or issuance of rights-of-way for use of existing 
facilities or improvements for the same or similar purpose.
    (3) Addition of telecommunication cables and related facilities to 
electric transmission and distribution structures. The provisions of 
this proposed new CE are based on a similar CE promulgated by DOE (10 
CFR part 1021, Appendix B to subpart D, B 4.7) for adding fiber optic 
cable to transmission facilities or burying fiber optic cable in 
existing powerline or pipeline rights-of-way (see Table 2).
    (4) Siting, construction, and operation of small ground source heat 
pump systems that would be located in previously disturbed land. These 
systems are very small (typically for single family housing or small 
businesses), promote the use of renewable energy, and typically disturb 
less than 0.25 acre of previously disturbed land. For these reasons, 
the Agency has determined that this proposed new CE is a routine action 
that normally has no potential for significant environmental impacts. 
This proposed CE is also similar to a CE recently promulgated by DOE 
(10 CFR part 1021, Appendix B to subpart D, B 5.19) for the 
installation, modification, operation and removal of commercially 
available small-scale ground source heat pumps to support operations in 
single facilities (such as a school or community center) or contiguous 
facilities (such as an office complex) (see Table 2).
    (5) Siting, construction, and operation of small solar electric 
projects or solar thermal projects to be installed on an existing 
structure with no expansion of the footprint of the existing structure. 
These systems are small (typically for single family housing or small 
businesses), promote the use of renewable energy, and typically disturb 
less than 0.25 acre. For these reasons, and the fact that the activity 
would occur within an existing footprint (already disturbed), the 
Agency has determined that this proposed new CE is a routine action 
that normally has no potential for significant environmental impacts 
(see Table 2).
    (6) Siting, construction, and operation of small biomass projects, 
such as animal waste anaerobic digesters or gasifiers that would use 
feedstock produced on site (such as a farm where the site has been 
previously disturbed) and supply gas or electricity for the site's own 
energy needs with no or only incidental export of energy. These systems 
are small and typically disturb less than 0.25 acre. They are normally 
sited within an existing and previously disturbed site such as a farm's 
manure lagoon or other waste facility to convert bio-gas (usually 
methane) into electricity, and include no or only incidental export of 
energy. This type of proposed action is currently included as a Class I 
EA in Sec.  1940.311(c)(4) (see also Section V.C). All of the EAs 
prepared for these types of actions have resulted in FONSIs. For this 
reason, the Agency is proposing that these actions should be classified 
as eligible for a new CE (see Table 2).
    (7) Construction of small standby electric generating facilities of 
one megawatt or less total capacity and associated facilities, for the 
purpose of providing emergency power for or startup of an existing 
facility. This is a routine action for emergency preparedness purposes 
at existing sites and typically disturbs less than 0.25 acre. This 
proposed CE includes an existing RUS CE (see Table 1).
    (8) Additions or modifications to electric power transmission 
facilities that would not affect the environment beyond the previously 
developed facility area including, but not limited to, switchyard rock 
grounding upgrades, secondary containment projects, paving projects, 
seismic upgrading, tower modifications, changing insulators, and 
replacement of poles, circuit breakers, conductors, transformers, and 
crossarms. This proposed CE includes an existing RUS CE (see Table 1). 
The provisions of the proposed CE are also similar to an existing CE 
promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, B 4.6), 
which relates to the additions and modifications to transmission 
facilities.
    (9) Safety, environmental, or energy efficiency improvements within 
an existing electric generation facility, including addition, 
replacement, or upgrade of facility components (such as precipitator, 
baghouse, or scrubber installations), that do not result in a change to 
the design capacity or function of the facility and do not result in an 
increase in pollutant emissions, effluents discharges, or waste 
products. This proposed CE includes two existing RUS CEs (see Table 1). 
The provisions of the proposed CE are also similar to an existing CE 
promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, B 5.1), 
which relates to actions to conserve energy and promote energy 
efficiency.
Promulgation of Rules or Formal Notices (Sec.  1970.53(e))
    This paragraph proposes to categorically exclude the promulgation 
of rules or formal notices for policies, programs, or projects that 
have no potential for significant environmental impacts because they 
would allow for no or minimal construction or changes in operations. 
This proposed CE would apply to the vast majority of Agency rules or 
notices regarding new or revised existing programs where the proposed 
implementation has no potential for significant adverse environmental 
impacts because they involve no or minimal alterations in the physical 
environment and typically occur on previously disturbed land. This 
proposed CE includes an existing RHS/RBS CE (see Table 1).
Agency Proposals for Legislation (Sec.  1970.53(f))
    This paragraph proposes to categorically exclude Agency proposals 
for legislation that have no potential for significant environmental 
impacts because they would allow for no or minimal construction or 
changes in operations, where minimal change in use has been defined in 
the rule language in Sec.  1970.53(a)(2). This proposed CE is new, but 
is consistent with other CEs listed in proposed Sec.  1970.53 related 
to activities that involve no or only minor construction or changes in 
operation and which have been shown to have no significant impact based 
on Agency experience (see Table 2). All other proposed legislation 
would require preparation of an EA or, if necessary, an EIS (see 
proposed Sec.  1970.151(b)(8)).
Administrative Actions (1970.53(g))
    This paragraph proposes to categorically exclude administrative 
actions including procurement activities for goods and services, 
routine facility operations, and personnel actions. Such actions 
typically involve only paperwork type activities and have been shown to 
have no significant impact based on Agency experience. This proposed CE 
consolidates the content from four existing Agency CEs (see Table 1). 
This proposed CE is also based on similar CEs promulgated by DOE (10 
CFR part 1021), Appendix A to subpart D, A.1 and EPA (40 CFR 
6.204(a)(2)(i) which include routine administrative, financial, and 
personnel actions.

[[Page 6758]]

CE Involving Small-Scale Development (Sec.  1970.54)
    The CEs in this proposed section are for proposals that require an 
applicant to submit environmental documentation with their application 
to facilitate Agency determination of extraordinary circumstances. The 
proposed section provides that the environmental documentation must be 
submitted by the applicant as directed by the Agency. The proposed 
section also describes what the applicant's environmental documentation 
must contain, and specifies that the documentation submitted must be 
accurate, complete, and capable of verification.
    While CEs listed in both proposed Sec. Sec.  1970.53 and 1970.54 
are all subject to a review with respect to extraordinary 
circumstances, the proposed CEs listed in Sec.  1970.54 involve small-
scale development and, as a result, have a greater potential to involve 
extraordinary circumstances. For this reason, the Agency proposes that 
for the CEs in this section, applicants be required to submit 
environmental documentation with their application to facilitate Agency 
determination of the presence or absence of extraordinary 
circumstances. While in the Agency's experience, these actions 
generally do not pose the potential for significant environmental 
impacts, the Agency believes that additional scrutiny with regard to 
extraordinary circumstances would help ensure that the use of a CE was 
appropriate.
    For the proposals listed in this section, failure to submit the 
required documentation will postpone further consideration of the 
applicant's proposal until the environmental documentation is 
submitted, or the Agency may deny the request for financial assistance. 
This provision highlights that, without sufficient information to 
determine the potential for extraordinary circumstances, the Agency 
cannot determine whether application of a CE within this section is 
appropriate. Without the ability to make such a finding, the Agency 
would be unable to approve the applicant's proposal. This approach is 
consistent with current Agency policy and practice and with NEPA 
requirements.
    The proposed CEs in Sec.  1970.54 (small-scale, site specific 
development, small-scale corridor development, and small energy 
proposals) are substantially the same as, or similar to, the Agency 
categorical exclusions (or Class I EAs) and/or other agencies current 
NEPA implementing regulations, with some modifications to clarify the 
intended applicability of the categorical exclusion. Table 3 lists all 
of the proposed CEs in Sec.  1970.54 and indicates whether they were 
derived from existing Agency CEs (and if so, where) or whether they are 
new.
    The explanation for proposing the new CEs in Sec.  1970.54 is 
provided in Table 4. Some of the proposed new CEs are based on Agency 
experience in preparing EAs that have always resulted in FONSIs for 
these or similar types of proposals; some proposed CEs are based on a 
CE promulgated by another Federal agency for a similar type of 
proposal. As noted in Section IV, the adoption of CEs promulgated by 
other agencies is encouraged by the CEQ CE Guidance (75 FR 75628 
(2010)).

 Table 3--Sources for Proposed Categorical Exclusions in Sec.   1970.54
------------------------------------------------------------------------
                                    Source: RHS/RBS       Source: RUS
 Proposed categorical exclusions  regulations (7 CFR  regulations (7 CFR
         7 CFR part 1970             part 1940-G)         part 1794)
------------------------------------------------------------------------
 Sec.   1970.54 Categorical Exclusions Involving Small-Scale Development
                        (documentation required)
------------------------------------------------------------------------
         Sec.   1970.54(a) Small-Scale Site-Specific Development
------------------------------------------------------------------------
Sec.   1970.54(a) Financial       Sec.                Sec.
 assistance for small-scale site-  1940.310(d)(4).     1794.21(b)(4).
 specific development activities  Sec.                Sec.
 (including construction,          1940.310(d)(5).     1794.21(b)(8).
 expansion, repair,               Class I EAs: Sec.   Sec.
 rehabilitation or other            1940.311(c)(7).    1794.21(b)(12).
 improvements for rural           Sec.                Sec.
 development) on no more than 10   1940.311(a)(1).     1794.21(b)(19).
 acres and where the action       Sec.                Sec.
 would not cause a substantial     1940.311(b)(1).     1794.21(b)(25).
 increase in traffic.             Sec.                Sec.
                                   1940.311(b)(3).     1794.21(b)(26).
                                  Sec.                Sec.
                                   1940.311(a)(2).     1794.22(a)(3).
                                  Sec.                Sec.
                                   1940.311(b)(2).     1794.22(a)(4).
                                  Class II EA: Sec.   Sec.
                                    1940.312(a)(1)     1794.22(b)(3).
                                   [if less than 10
                                   acres], otherwise
                                   an EA].
------------------------------------------------------------------------
           Sec.   1970.54(b) Small-Scale Corridor Development
------------------------------------------------------------------------
Sec.   1970.54(b)(1)              Sec.                ..................
 Construction or repair of         1940.310(c)(2).
 roads, streets and sidewalks
 (and related structures) that
 would occur within an existing
 right-of-way and with minimal
 change in use, size, capacity,
 purpose or location from the
 original infrastructure.
Sec.   1970.54(b)(2) Improvement  Sec.                Sec.
 and expansion of existing         1940.310(d)(5).     1794.22(b)(4).
 water, waste water and gas       Class I EA: Sec.    Sec.
 utility systems occurring         1940.311(b)(1).     1794.22(b)(6).
 within one mile of currently
 served areas (irrespective of
 capacity increase), or
 including an increase in
 capacity of not more than 30
 percent of existing user
 population.
Sec.   1970.54(b)(3) Replacement  ..................  Sec.
 of utility lines [where road                          1794.21(b)(14).
 reconstruction is undertaken by
 non-Agency applicants] where
 relocation of lines is either
 within or immediately adjacent
 to the new road easement or
 right-of-way.
Sec.   1970.54(b)(4)              ..................  Sec.
 Construction of new                                   1794.22(a)(1)(i).
 distribution lines and
 associated facilities less than
 69 kV.
Sec.   1970.54(b)(5)              ..................  Sec.
 Installation of                                       1794.22(a)(2).
 telecommunication lines, cables
 and related facilities.
------------------------------------------------------------------------

[[Page 6759]]

 
             Sec.   1970.54(c) Small Scale Energy Proposals
------------------------------------------------------------------------
Sec.   1970.54(c)(1)              ..................  Sec.
 Construction of electric power                        1794.22(a)(6).
 substations (including                               Sec.
 switching stations and support                        1794.22(a)(7).
 facilities) or modification of
 existing substations and
 support facilities.
Sec.   1970.54(c)(2)              ..................  Sec.
 Construction of electric                              1794.22(a)(1).
 transmission lines 10 miles in
 length or less, but not for the
 integration of major new
 generation resources into a
 bulk transmission system.
Sec.   1970.54(c)(3)              ..................  Sec.
 Reconstruction (upgrading or                          1794.22(a)(5).
 rebuilding) and/or minor
 relocation of existing electric
 transmission lines 20 miles in
 length or less to enhance
 environmental and land use
 values, for reliability or
 access improvement.
Sec.   1970.54(c)(4) Repowering   ..................  Sec.
 or uprating modifications or                          1794.21(b)(24).
 expansion of an existing
 unit(s) up to 50 average MW at
 electric generating facilities
 where the action would be taken
 to maintain or improve
 efficiency, capacity, or energy
 output of the facility and
 where any air emissions from
 such activities are within the
 limits of an existing air
 permit.
Sec.   1970.54(c)(5)              ..................  Sec.
 Installation of new generating                        1794.22(a)(9).
 units or replacement of
 existing generating units at
 existing hydroelectric facility
 or dam where the action would
 result in no change in the
 normal maximum surface area or
 normal maximum surface
 elevation of the existing
 impoundment.
Sec.   1970.54(c)(6)              ..................  Sec.
 Installation of heat recovery                         1794.22(a)(12).
 steam generator and steam
 turbine where the turbine has a
 rating of 200 average MW or
 less on an existing electric
 generation site for the purpose
 of combined cycle operations.
                                 ---------------------------------------
Sec.   1970.54(c)(7)                       New CE. See Table 4.
 Construction of small electric
 generating facilities,
 excluding geothermal and solar
 electric projects, but
 including wind and biomass less
 than 10 average MW.
Sec.   1970.54(c)(8) Geothermal            New CE. See Table 4.
 electric projects developed on
 up to 10 acres of land.
Sec.   1970.54(c)(9) Solar                 New CE. See Table 4.
 electric projects developed on
 up to 10 acres of land.
                                 ---------------------------------------
Sec.   1970.54(c)(10)             ..................  Sec.
 Distributed resources of any                          1794.22(a)(8).
 capacity located at or adjacent
 to an existing landfill site or
 waste water treatment facility
 powered by refuse-derived fuel.
                                 ---------------------------------------
Sec.   1970.54(c)(11) Small                New CE. See Table 4.
 conduit hydroelectric
 facilities having a total
 installed capacity of not more
 than 5 MW using an existing
 conduit.
Sec.   1970.54(c)(12)                      New CE. See Table 4.
 Modifications or enhancements
 to existing facilities or
 structures that would not
 substantially change the
 footprint or function of the
 facility or structure and that
 are undertaken for the purpose
 of improving energy efficiency
 or promoting pollution
 prevention. This CE would cover
 new programs to promote
 renewable energy conversions
 and energy efficiency
 improvements to existing
 facilities.
------------------------------------------------------------------------


Table 4--Explanation for New Proposed Categorical Exclusions in Proposed
                             Sec.   1970.54
------------------------------------------------------------------------
  New proposed categorical exclusion 7
             CFR part 1970                         Explanation
------------------------------------------------------------------------
Sec.   1970.54(c)(7) Construction of     This CE is similar to two CEs
 small electric generating facilities,    recently promulgated by the
 excluding geothermal and solar           U.S. Department of Energy (CE
 electric projects, but including wind    B.5.18 and 5.20). In addition,
 and biomass less than 10 average MW.     Agency managers and
                                          environmental specialists have
                                          reviewed previous Agency EAs
                                          and determined that these
                                          types of proposals could be
                                          effectively evaluated at the
                                          CE level.
Sec.   1970.54(c)(8) Geothermal          This CE is similar to a CE
 electric projects developed on up to     recently promulgated by the
 10 acres of land.                        U.S. Department of Energy (CE
                                          B5.19). In addition, Agency
                                          managers and environmental
                                          specialists have reviewed EAs
                                          and determined that these
                                          types of proposals could be
                                          effectively evaluated at the
                                          CE level.
Sec.   1970.54(c)(9) Solar electric      This CE is similar to two CEs
 projects developed on up to 10 acres     recently promulgated by the
 of land.                                 U.S. Department of Energy (CE
                                          B5.16 and CE B5.17). In
                                          addition, Agency managers and
                                          environmental specialists have
                                          reviewed EAs and determined
                                          that these types of proposals
                                          could be effectively evaluated
                                          at the CE level.

[[Page 6760]]

 
Sec.   1970.54(c)(11) Small conduit      The Agency has 7 years of
 hydroelectric facilities having a        experience in conducting EAs
 total installed capacity of not more     for small energy proposals and
 than 5 MW using an existing conduit.     has found that these types of
                                          facilities have no potential
                                          to cause significant
                                          environmental effects. Other
                                          federal agencies have existing
                                          CEs for these types of actions
                                          and RD wishes to be consistent
                                          across agencies. The U.S.
                                          Department of Energy and the
                                          Federal Energy Regulatory
                                          Commission both have similar
                                          CEs (CE B5.24 [DOE] and 18 CFR
                                          Sec.   380.4(14) [FERC]).
Sec.   1970.54(c)(12) Modifications or   This CE is similar to two CEs
 enhancements to existing facilities or   recently promulgated by the
 structures that would not                U.S. Department of Energy (B
 substantially change the footprint or    5.2 and 6.8) and Department of
 function of the facility or structure    Commerce (A-1). In addition,
 and that are undertaken for the          Agency managers and
 purpose of improving energy efficiency   environmental specialists have
 or promoting pollution prevention.       reviewed EAs and determined
 This CE would cover new programs to      that these types of proposals
 promote renewable energy conversions     could be effectively evaluated
 and energy efficiency improvements to    at the CE level.
 existing facilities.
------------------------------------------------------------------------

    For those CEs in Sec.  1970.54 shown to be consistent with CEs in 
Sec. Sec.  1794.22 (CEs with ER) and 1940.311 (Class I EAs), the 
documentation requirements under the proposed rule would be very 
similar to the requirements for Class I EAs (e.g., FmHA form 1940-20), 
but less than the ER requirements currently found in 1794.22. Because 
ERs are specific to RUS, they are not referenced in the proposed 
regulation. The Agency has determined that, based on experience, the 
level of documentation specified in Sec.  1970.54 will provide 
sufficient environmental information to facilitate Agency determination 
of extraordinary circumstances.
    For a limited number of CEs currently found in Sec.  1794.21 (no 
ER), the documentation requirements would be greater under the proposed 
rule, although some level of documentation is still required under the 
existing regulations to allow Agency evaluation of an applicant's 
proposal. The Agency requirement for such documentation is to ensure 
that no extraordinary circumstances would be present in such projects.
    Small-scale site-specific development (Sec.  1970.54(a)). The 
proposed CE described in this paragraph applies to financial assistance 
where site development activities (including construction, expansion, 
repair, rehabilitation or other improvements) for rural development 
purposes would impact not more than 10 acres of real property and would 
not cause a substantial increase in traffic.
    The use of a 10-acre limit is based on current thresholds of 10 
acres currently found in the existing Sec.  1794.21(a)(22), which 
allows construction of facilities and buildings involving no more than 
10 acres of physical disturbance or fenced property. The meaning of 
``substantial'' relating to an increase in traffic is a subjective term 
(discussed in Section IV), the meaning of which is dependent on the 
size of the project and the existing roadway infrastructure, capacity, 
and motor vehicle use. In general, it refers to a noticeable effect on 
the roads and the businesses or residents that utilize them, with 
respect to whether there would be an increased number of motor vehicles 
on the road resulting in congestion, longer travel times, etc.
    By its terms, this proposed CE does not apply to new industrial 
proposals or new energy generation over 100 kilowatts (e.g., ethanol 
and biodiesel production facilities), or those classes of actions 
listed in Sec. Sec.  1970.53, 1970.101, or 1970.151.
    This proposed CE is intended to apply to a wide range of rural 
development activities under the Agency's 86 programs. Rather than 
attempting to provide an exhaustive list of proposed actions to which 
the Agency intends this CE to apply, several examples of such purposes 
and activities are provided. An attempt to provide an exhaustive list 
could too easily result in a failure to include all appropriate 
proposed actions thereby preventing the application of this CE to 
activities for which the CE is appropriate.
    One of the examples provided in this section is the construction of 
telecommunications towers and associated facilities, if the towers and 
associated facilities are 450 feet or less in height and would not be 
in or visible from an area of great scenic value. These limitations are 
based on a similar CE promulgated by DOE (10 CFR part 1021, Appendix B 
to subpart D, B 1.19) and DOC (Department Administrative Order 216-6, 
A-4), which relate to siting, construction, and operation of microwave 
and radio communication towers. The threshold height of 450 feet or 
less is consistent with a threshold of ``over 450 feet in height'' for 
a new or existing antenna structure established by the Federal 
Communications Commission for an EA-level review (47 CFR 1.1307).
    This proposed CE is intended to include numerous existing Agency 
CEs (see Table 3). Agency experience in implementing these projects has 
not resulted in significant environmental impacts. For this reason, the 
Agency proposes to continue to classify these actions as CEs. Examples 
include, but are not limited to:
     Group homes, detention facilities, nursing homes, or 
hospitals, providing a net increase in beds of not more than 25 percent 
or 25 beds, whichever is greater (Sec.  1940.311(b)(2)).
     Land clearing activity, funded as an independent action 
(similar to Sec.  1940.311(c)(3), but less than 10 acres).
     New bulk commodity storage and associated handling 
facilities within existing fossil-fueled generating station boundaries 
for the purpose of co-firing bio-fuels and refuse derived fuels (Sec.  
1794.21(b)(26)).
     Repair, rehabilitation, or restoration of water control, 
flood control, or water impoundment facilities, such as dams, dikes, 
levees, detention reservoirs, and drainage ditches, with minimal change 
in use, size, capacity, purpose, operation, location, or design from 
the original facility. (Sec.  1940.310(d)(5).
     Installation or enlargement of irrigation facilities where 
the system is designed to irrigate no more than 80 acres (Sec.  
1940.310(d)(6) and consistent with Sec.  1940.311(c)(1), Class I EA for 
irrigation of more than 80 acres).
     Replacement or restoration of irrigation facilities with 
no or minimal change in use, size, capacity, or location from original 
facility (Sec.  1940.310(d)(7)).
    The provisions of this proposed CE are also similar to existing CEs 
promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, B 1.15) 
and

[[Page 6761]]

DOC (Department Administrative Order 216-6, A-1 and A-2), which relate 
to the siting, construction, modification, minor renovations, and 
additions to buildings and roads within or contiguous to already 
developed or previously disturbed areas or which do not result in a 
change in functional use. These CEs do not impose an acreage 
limitation.
    Small-scale corridor development (Sec.  1970.54(b)). The proposed 
CEs described in this paragraph apply to financial assistance for the 
following actions:
    (1) Construction or repair of roads, streets, and sidewalks, 
including related structures such as curbs, gutters, storm drains, and 
bridges, in an existing right-of-way with minimal change in use, size, 
capacity, purpose or location from the original infrastructure. This 
proposed CE includes one existing Agency CE (see Table 3). The 
provisions of the proposed CE are also similar to existing CEs 
promulgated by DOC (Department Administrative Order 216-6, A-1) and BLM 
(Department of the Interior Departmental Manual 516, Chapter 11, E 13 
and E 17), which relate to minor renovations and additions or upgrades 
to roads and existing rights-of-way.
    (2) Improvement and expansion of existing water, waste water, and 
gas utility systems no greater than one mile out from currently served 
areas irrespective of the percent of increase in new capacity, or 
increasing capacity not more than 30 percent of the existing population 
[or providing capacity to serve no more than a 30 percent increase in 
the existing population]. This proposed CE includes three existing 
Agency CEs and one Class I EA (see Table 3). The provisions of the 
proposed CE are also similar to existing CEs promulgated by EPA (40 CFR 
6.204(a)(1)(ii) and (iii)) and BLM (Department of the Interior 
Departmental Manual 516, Chapter 11, E 17), which relate to the minor 
upgrading or minor expansion of system capacity or rehabilitation of 
existing infrastructure systems. The proposed CE incorporates the 
existing Agency CEs with those promulgated by EPA because the two 
agencies often provide joint financing on the same proposals.
    (3) Replacement of utility lines where road reconstruction 
undertaken by non-Agency applicants requires the relocation of lines 
either within or immediately adjacent to the new road easement or 
right-of-way. This proposed CE, which encompasses utilities such as 
water and sewer lines, includes an existing RUS CE (see Table 3).
    (4) Construction of new distribution lines and associated 
facilities less than 69 kV. This proposed CE includes an existing RUS 
CE (see Table 3).
    (5) Installation of telecommunications lines, cables, and related 
facilities. This proposed CE includes an existing RUS CE (see Table 3).
    Small scale energy proposals (Sec.  1970.54(c)). For many years, 
the Agency has prepared EAs for small scale energy projects including 
renewable energy projects. All have resulted in a FONSI and have no 
potential for significant impact. For this reason, the Agency has 
concluded that these types of projects, with appropriate limitations, 
are appropriate for CEs. The Agency is also relying on the experience 
of other Federal agencies such as DOE who implement similar programs 
and have had similar experiences. The proposed CEs described in this 
paragraph apply to financial assistance for the following actions:
    (1) Construction of electric power substations (including switching 
stations and support facilities) or modification of existing 
substations and support facilities. This proposed CE includes two 
existing RUS CEs (see Table 3), although the proposed CE does not 
include construction of electric power lines and associated distance or 
voltage thresholds.
    The provisions of the proposed CE are also similar to an existing 
CE promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, B 
4.11), which relates to construction and modification of electric power 
substations or interconnection facilities.
    (2) Construction of electric transmission lines 10 miles in length 
or less, but not for the integration of major new generation resources 
into a bulk transmission system. This proposed CE includes one existing 
RUS CE (see Table 3), although the 25-mile threshold length included in 
Sec.  1794.22(a)(1) has been changed to a 10-mile length threshold to 
be consistent with DOE. The latter is due to the fact that the Agency 
cooperates with DOE in the financing and permitting of multiple 
transmission projects and consistency is desirable. With respect to 
Sec.  1794.22(a)(5), the portion of this existing CE involving more 
than 20 percent pole replacement will be considered the same as new 
construction and is partly captured under this proposed CE for new 
transmission lines 10 miles in length or less (see also Sec.  
1970.54(c)(3)). The provisions of the proposed CE are consistent with 
an existing CE promulgated by DOE (10 CFR part 1021, Appendix B to 
subpart D, B 4.12), which relates to the construction of electric 
powerlines 10 miles in length or less, or 20 miles in length or less 
within previously disturbed or developed powerline or pipeline rights-
of-way.
    (3) Reconstruction (upgrading or rebuilding) and/or minor 
relocation of existing electric transmission lines 20 miles in length 
or less to enhance environmental and land use values, for reliability 
or access improvement. Such actions include relocations to avoid right-
of-way encroachments, resolve conflict with property development, 
accommodate road/highway construction, allow for the construction of 
facilities such as canals and pipelines, or reduce existing impacts to 
environmentally sensitive areas. This proposed CE includes an existing 
RUS CE (see Table 3). With respect to Sec.  1794.22(a)(5), the portion 
of this existing CE involving less than 20 percent pole replacement is 
partly captured under this proposed CE for rebuilding existing lines 
less than 20 miles. The provisions of the proposed CE are consistent 
with a CE promulgated by DOE (10 CFR part 1021, Appendix B to subpart 
D, B 4.13), which relates to the upgrading and rebuilding of existing 
powerlines 20 miles in length of less.
    (4) Repowering or uprating modifications or expansion of an 
existing unit(s) up to 50 average MW at electric generating facilities 
in order to maintain or improve the efficiency, capacity, or energy 
output of the facility. Any air emissions from such activities must be 
within the limits of an existing air permit. This proposed CE includes 
an existing RUS CE (see Table 3).
    (5) Installation of new generating units or replacement of existing 
generating units at an existing hydroelectric facility or dam which 
results in no change in the normal maximum surface area or normal 
maximum surface elevation of the existing impoundment. All supporting 
facilities and new related electric transmission lines 10 miles in 
length or less are included. This proposed CE includes an existing RUS 
CE (see Table 3).
    (6) Installation of a heat recovery steam generator and steam 
turbine with a rating of 200 average MW or less on an existing electric 
generation site for the purpose of combined cycle operations. All 
supporting facilities and new related electric transmission lines 10 
miles in length or less are included. This proposed CE includes an 
existing RUS CE (see Table 3).
    (7) Construction of small electric generating facilities (except 
geothermal and solar electric projects), including

[[Page 6762]]

those fueled with wind or biomass, capable of producing not more than 
10 average MW. All supporting facilities and new related electric 
transmission lines 10 miles in length or less are included. This 
proposed CE is new (see Table 4). In addition to relying on Agency 
experience in preparing EA/FONSIs for these types of actions for many 
years, the provisions of the proposed CE are similar to two CEs 
recently promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, 
B 5.18 and B 5.20), which relate to the installation, modification, 
operation, and removal of commercially available wind turbines 
(generally not more than two) and small-scale biomass power plants 
(generally less than 10 average MW), each located within a previously 
disturbed or developed area.
    (8) Geothermal electric projects developed on up to 10 acres of 
land and including installation of one geothermal well for the 
production of geothermal fluids for direct use application (such as 
space or water heating/cooling) or for power generation. All supporting 
facilities and new related electric transmission lines 10 miles in 
length or less are included. The proposed CE is new (see Table 4) and 
would include new programs to promote renewable energy conversions and 
energy efficiency improvements to existing facilities. The Agency has 
prepared EAs for these types of projects, all of which resulted in a 
FONSI. Thus, the Agency has concluded that these types of actions are 
appropriate for a CE. In addition, this proposed CE is similar to a CE 
recently promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, 
B 5.19) for the installation, modification, operation, and removal of 
commercially available small-scale ground source heat pumps to support 
operations in single facilities (such as a school or community center) 
or contiguous facilities (such as an office complex). In addition, EAs 
prepared by DOE and BLM for these types of actions (and larger) have 
routinely resulted in findings of no significant impact.
    (9) Solar electric projects developed on up to 10 acres of land 
including all supporting facilities and new related electric 
transmission lines 10 miles in length or less. The proposed CE is new 
(see Table 4) and would cover new programs to promote renewable energy 
conversions and energy efficiency improvements to existing facilities. 
The 10-acre and 10-mile limitations are consistent with proposed Sec.  
1970.54(a) and with thresholds used in DOE CEs. The provisions of the 
proposed CE are similar to two CEs recently promulgated by DOE (10 CFR 
part 1021, Appendix B to subpart D, B 5.16 and B 5.17), which relate to 
the installation, modification, operation, and removal of commercially 
available solar photovoltaic systems and small-scale solar thermal 
systems located on or contiguous to a building, and if located on land, 
generally comprising less than 10 acres within a previously disturbed 
or developed area. Based on the experience of the Agency and DOE, the 
Agency has determined that this proposed CE normally has no potential 
for significant environmental impacts.
    (10) Distributed resources of any capacity located at or adjacent 
to an existing landfill site or wastewater treatment facility that is 
powered by refuse-derived fuel. All supporting facilities and new 
related electric transmission lines 10 miles in length or less are 
included. This proposed CE includes an existing RUS CE (see Table 3). 
In addition, the provisions of the proposed CE are similar to a CE 
recently promulgated by DOE (10 CFR part 1021, Appendix B to subpart D, 
B 5.21), which relates to the installation, modification, operation, 
and removal of commercially available methane gas recovery and 
utilization system installed within a previously disturbed or developed 
area on or contiguous to an existing landfill or wastewater treatment 
plant. DOE has similarly recognized that these types of actions do not 
result in significant environmental impacts.
    (11) Small conduit hydroelectric facilities having a total 
installed capacity of not more than 5 average MW using an existing 
conduit such as an irrigation ditch or pipe into which a turbine would 
be placed for the purpose of electric generation. All supporting 
facilities and new related electric transmission lines 10 miles in 
length or less are included. This is a new CE (see Table 4), although 
its provisions are similar to a CE promulgated by the Federal Energy 
Regulatory Commission (18 CFR 380.4(14)) for small conduit 
hydroelectric facilities, and a CE recently promulgated by DOE (10 CFR 
part 1021, Appendix B to subpart D, B 5.24), which relates to the 
installation, modification, operation, and removal of commercially 
available small-scale drop-in, run-of-the-river hydroelectric systems.
    (12) Modifications or enhancements to existing facilities or 
structures that would not substantially change the footprint or 
function of the facility or structure and that are undertaken for the 
purpose of improving energy efficiency, or promoting pollution 
prevention, safety, reliability and security. This includes, but is not 
limited to, retrofitting existing facilities to produce biofuels, and 
replacing fossil fuels used to produce heat or power in biorefineries 
with renewable biomass. This also includes installation of fuel blender 
pumps and associated changes within an existing fuel facility. The 
proposed new CE (see Table 4) would cover new programs to promote 
renewable energy conversions and energy efficiency improvements to 
existing facilities. The provisions of the proposed CE are similar to 
existing CEs promulgated by DOE (10 CFR part 1021, Appendix B to 
subpart D, B 5.2 and 6.8) and DOC (Department Administrative Order 216-
6, A-1), which relate to the minor modifications to buildings that do 
not change functional use of the facility, and to equipment, existing 
pumps, and existing piping configurations conveying materials such as 
air, brine, carbon dioxide, geothermal system fluids, produced water, 
steam, and water). In particular, DOE CE B6.8 relates to minor 
modifications specifically for waste minimization and material reuse, 
including minor operational changes in existing facilities. In 
addition, the USDA Farm Service Agency (FSA) issued a final 
programmatic EIS for the Biomass Crop Assistance Program in June 2010. 
In the associated Record of Decision, FSA concluded that the 
collection, harvest, storage, and transportation of eligible materials 
for use in a biomass conversion facility and the establishment and 
production of eligible crops for conversion to bioenergy production 
would not have a significant environmental impact (75 FR 65995 (2010)).
CE for Multi-Tier Actions (Sec.  1970.55)
    For a limited number of programs Congress directed the Agency to 
provide financial assistance to eligible recipients, including but not 
limited to: Intermediaries; community-based organizations, such as 
housing or community development non-profit organizations; rural 
electric cooperatives; or others organizations with similar financial 
arrangements who then, in turn, provide financial assistance to 
eligible recipients. The entities or organizations receiving the 
financial assistance from the Agency are considered ``primary 
recipients.'' As the direct recipients of this financial assistance, 
``primary recipients'' then, in turn, provide financial assistance to 
other parties, referred to as ``secondary recipients'' or ``ultimate 
recipients.'' This series of transactions from the Agency to a primary 
recipient and subsequently to an ultimate recipient is termed a 
``multi-tiered action.''

[[Page 6763]]

    Under this proposed section, the Agency's approval of financial 
assistance to a primary recipient of a multi-tier program when such 
financial assistance will be extended in the future to presently 
unknown, eligible secondary or ultimate recipients will be 
categorically excluded, if the primary recipient agrees in writing to 
comply with certain covenants regarding the use of the financial 
assistance by the ultimate recipients. However, notwithstanding the 
primary recipient's agreement regarding the ultimate use of the 
Agency's financial assistance, compliance with NEPA and other 
applicable environmental requirements remains the responsibility of the 
Agency and nothing in the proposed section is intended to delegate 
those responsibilities to a primary or ultimate recipient.
    There are no analogous CEs in either of the existing rules. The 
Agency is proposing this CE because the initial approval of financial 
assistance to a primary recipient is an action that has no immediate 
environmental effect. Under Sec.  1940.11(a)(3) one of the multi-tier 
programs that has been administered since the mid-1980's (RHS's Housing 
Preservation Grant Program) required the preparation of an EA for the 
initial approval and obligation of federal funds. The Agency has 
prepared EAs for these types of projects, all of which resulted in a 
FONSI. Thus, the Agency has concluded that these types of actions for 
all multi-tier programs are appropriate for a CE.
    Because the specific type, location, and scope of all proposals to 
be funded by a primary recipient are not known at the time financial 
assistance is provided to a primary recipient, the environmental 
effects of these proposals are not known or analyzed at the time the 
financial assistance is provided. However, although all of the details 
of the proposals of potential secondary recipients may be unknown at 
the time the financial assistance is provided to a primary recipient, 
the primary recipient is limited to making the financial assistance 
available to secondary recipients for the types of projects specified 
in the primary recipient's application.
    Under this proposed CE, the primary recipient would screen all 
proposed uses of funds and determine if a categorical exclusion is 
appropriate pursuant to 7 CFR 1970.53 or 1970.54 and under the Agency's 
environmental policies and procedures when the specifics of a loan or 
grant to an ultimate recipient become known. If a proposal by an 
ultimate recipient is classified under Sec.  1970.54, the primary 
recipient will either prepare the appropriate documentation or request 
additional environmental documentation from the ultimate recipient to 
ensure there are no extraordinary circumstances. If the ultimate 
recipient's proposal is classified under 7 CFR part 1970, subpart C or 
D, the primary recipient will seek the advice of the Agency and if 
necessary, the Agency will independently review and approve any EA or 
EIS that was required.
    Primary recipients that fund projects without complying with the 
requirements of this proposed section would be subject to penalties, 
including withdrawal of Agency assistance, withdrawal of Agency 
authorizations, or suspension from participation in Agency programs. 
Despite the Primary recipient's responsibilities outlined in this part, 
the Agency maintains ultimate control and responsibility over the NEPA 
process through its oversight and review.

C. Subpart C--Environmental Assessments

General (Sec.  1970.101)
    This proposed section describes the purpose of an EA and states 
that if, during the preparation of an EA, the Agency determines that 
the proposal will have a potentially significant impact on the quality 
of the human environment, the Agency will prepare an EIS. This proposed 
section also describes the types of Agency actions for which an EA will 
typically be prepared.
    The requirements in this proposed section are consistent with 
existing Sec. Sec.  1940.311, 1940.312, 1794.23 through 1794.24, 
1794.40, and 1794.50. However, the Agency is proposing some revisions, 
as described below.
    The proposed rule would eliminate the distinction between Class I 
and Class II EAs (Sec. Sec.  1940.311 and 1940.312) and EAs with and 
without scoping (Sec. Sec.  1794.23 and 1794.24). This is consistent 
with the CEQ NEPA regulations, which do not recognize different 
classifications of EAs.
    As discussed above in Section V.B, the Agency has determined that 
some proposed actions that require the preparation of a Class I EA 
under the existing regulations are more appropriately classified as 
CEs. This determination is based on the Agency's experience in 
preparing EAs for these small-scale projects, all of which resulted in 
a FONSI. These EAs and FONSIs demonstrate that, absent extraordinary 
circumstances and in most instances, these types of actions do not 
individually or cumulatively have a significant impact on the 
environment. For this reason, the Agency is proposing to include these 
types of actions as CEs.
    Table 5 provides a summary of the Class I EA actions in Sec.  
1940.311 that the Agency proposes to treat as CEs under the proposed 
regulations and indicates the Class I EA actions that are not proposed 
for inclusion in 7 CFR part 1970 because they are no longer within the 
Agency's jurisdiction. These are addressed in more detail following 
Table 5. All other Class I EA actions in Sec.  1940.311 will continue 
to require EAs under the proposed 7 CFR part 1970.

     Table 5--Treatment of Class I EA Actions in Proposed Part 1970
------------------------------------------------------------------------
                                            Treatment in proposed rule
  Class I EA actions (Sec.   1940.311)             (part 1970)
------------------------------------------------------------------------
Sec.   1940.311(a)(1)..................  CE in Sec.   1970.54(a).
Sec.   1940.311(a)(2)..................  CE in Sec.   1970.54(a).
Sec.   1940.311(a)(3)..................  CE in Sec.   1970.55.
Sec.   1940.311(b)(1)..................  CE in Sec.  Sec.   1970.54(a),
                                          1970.54(b)(2).
Sec.   1940.311(b)(2)..................  CE in Sec.   1970.54(a).
Sec.   1940.311(b)(3)..................  CE in Sec.   1970.54(a).
Sec.   1940.311(b)(4)..................  EA required.
Sec.   1940.311(c)(1)..................  EA required.
Sec.   1940.311(c)(2)..................  Not included in proposed rule--
                                          no longer in Agency
                                          jurisdiction.
Sec.   1940.311(c)(3)..................  EA required.
Sec.   1940.311(c)(4)..................  CE in Sec.   1970.53(d)(6).
Sec.   1940.311(c)(5)..................  Not included in proposed rule--
                                          no longer in Agency
                                          jurisdiction.
Sec.   1940.311(c)(6)..................  Not included in proposed rule--
                                          no longer in Agency
                                          jurisdiction.

[[Page 6764]]

 
Sec.   1940.311(c)(7)..................  CE under Sec.   1970.54(a).
Sec.   1940.311(c)(8)..................  EA required.
Sec.   1940.311(d)(1)..................  Included as extraordinary
                                          circumstance under Sec.
                                          1970.52.
Sec.   1940.311(d)(2)..................  CE in Sec.  Sec.
                                          1970.53(a)(5), 1970.53(c)(1).
Sec.   1940.311(d)(3)..................  CE in Sec.   1970.53(a)(5).
------------------------------------------------------------------------

    In general, most of the actions that required a Class I EA under 
the existing regulations are included in proposed Sec.  1970.54 as CEs 
for which an applicant must submit documentation (see Table 5). Such 
documentation would be similar to that which applicants must currently 
provide for a Class I EA, but the burden on Agency staff to prepare an 
EA would be significantly reduced.
    The following sections describe how the existing Class I EAs in 
Sec.  1940.311 are addressed in proposed Sec.  1970.54:
    Sec.  1940.311(a)(1) Financial assistance for a multi-family 
housing project, including labor housing which comprises at least 5 
units, but no more than 25 units. This Class I EA action is 
reclassified as a CE with documentation in the proposed rule and is 
captured in Sec.  1970.54(a)(1) Affordable Multi-family housing. The 
limitation for the proposed CE is now the size of the potentially 
affected area (less than 10 acres) rather than number of units.
    Sec.  1940.311(a)(2) Financial assistance for or the approval of a 
subdivision, as well as the expansion of an existing one which involves 
at least 5 lots but no more than 25 lots. The agency no longer 
routinely conducts subdivision approvals, but still may approve lots. 
Lot approval is included in Sec.  1970.54(a). The limitation for the 
proposed CE is now the size of the potentially affected area (less than 
10 acres) rather than number of lots.
    Sec.  1940.311(a)(3) Financial assistance for a housing 
preservation grant. As a multi-tier action, the approval of a housing 
preservation grant will be a CE under Sec.  1970.55 and will not 
require documentation. However, the majority of subsequent actions are 
expected to be classified under Sec. Sec.  1970.53 and 1970.54, where 
those classified under Sec.  1970.54 would require documentation. This 
is based on Agency review and experience with the Housing Preservation 
Grant Program, and the existing regulation.
    Sec.  1940.311(b)(1) Financial assistance for water and waste 
disposal facilities and natural gas facilities that meet certain 
specified criteria. This type of action is proposed for inclusion as a 
CE in the proposed rule and is captured in Sec.  1970.54(a)(4) relating 
to utility infrastructure and in Sec.  1970.54(b)(2) relating to the 
improvement and expansion of existing water, wastewater, and gas 
utility systems. The limitations for the proposed CEs include the size 
of the potentially affected area (less than 10 acres under Sec.  
1970.54(a)), or related to specific distance and capacity thresholds 
(under Sec.  1970.54(b)(2)), rather than discharge volumes and general 
boundary conditions as under the existing regulations. While the 
capacity threshold has changed from ``no more than 20 percent'' under 7 
CFR part 1940 to ``not more than 30 percent'' as proposed under 7 CFR 
part 1970, this change is consistent with the threshold for an EA 
(i.e., more than a 30 percent increase) in existing Sec.  
1794.22(c)(4).
    Sec.  1940.311(b)(2) Financial assistance for group homes, 
detention facilities, nursing homes, or hospitals, providing a net 
increase in beds of not more than 25 percent or 25 beds, whichever is 
greater. This type of action is captured in Sec.  1970.54(a)(3), 
Community Facilities such as municipal buildings, libraries, security 
services, fire protection, schools, health and recreation facilities if 
less than 10 acres. The limitation for the proposed CE is now the size 
of the potentially affected area (less than 10 acres) rather than 
number of beds.
    Sec.  1940.311(b)(3) Financial assistance for the construction or 
expansion of facilities, such as fire stations, retail stores, 
libraries, outpatient medical facilities, service industries, in 
addition to manufacturing plants, office buildings, and wholesale 
industries that meet specified criteria. This type of action is 
captured in Sec.  1970.54(a)(3), Community Facilities such as municipal 
buildings, libraries, security services, fire protection, schools, 
health and recreation facilities if less than 10 acres. The limitation 
for the proposed CE is now the size of the potentially affected area 
(less than 10 acres) rather than the type of facility.
    Sec.  1940.311(c)(7) Financial assistance for the use of a farm or 
portion of a farm for recreational purposes or nonfarm enterprises 
utilizing no more than 10 acres, provided that no wetlands are 
affected. If wetlands are affected, the application will fall under 
Class II as defined in Sec.  1940.312 of this subpart. This type of 
action, which is limited to no more than 10 acres in the proposed rule, 
is consistent with the 10-acre size limit placed on actions in proposed 
Sec.  1970.54 and is captured in Sec.  1970.54(a)(3), Community 
Facilities such as municipal buildings, libraries, security services, 
fire protection, schools, health and recreation facilities.
    In other instances, however, proposed actions requiring a Class I 
EA under the existing regulations are proposed for inclusion as CEs 
that, in the proposed rule, will not require the applicant to submit 
environmental documentation (see Table 5). For these actions, burdens 
on both applicants and on Agency staff will be reduced as compared to 
the existing regulations. Based on past experience, the Agency has 
determined that the potential for extraordinary circumstances is low 
and that requiring applicants to submit environmental documentation is 
unnecessary. In addition, the proposed rule provides that the Agency 
may request additional environmental documentation from the applicant 
at any time, specifically if the Agency determines that extraordinary 
circumstances may exist (proposed Sec.  1970.53).
    The following sections indicate how the existing Class I EAs are 
addressed in proposed Sec.  1970.53:
    Sec.  1940.311(c)(4) Financial assistance for the construction of 
energy producing facilities designed for on farm needs such as methane 
digesters and fuel alcohol production facilities; This Class I EA 
action is captured in Sec.  1970.53(d)(6).
    Sec.  1940.311(d)(2) Loan-closing and servicing activities, 
transfers, assumptions, subordinations, construction management 
activities, and amendments and revisions to all approved actions listed 
either in this section or equivalent in size or type to such actions 
and that alter the purpose, operation, location or design of the 
project from what was originally approved. Loan-closing and servicing 
activities are captured in Sec.  1970.53(a)(5), which provides that if 
``such [servicing] actions involve foreseeable future changes, the 
Agency will classify the

[[Page 6765]]

action according to this part and the appropriate level of 
environmental review will be prepared prior to the approval of such 
action.'' Transfers, assumptions, subordinations, and construction 
management activities are not included as separate CEs in the proposed 
rule. Rather, the Agency considers these actions to be included within 
the definition of ``loan servicing.'' Amendments and revisions to all 
approved actions are captured in Sec.  1970.53(c)(1).
    Sec.  1940.311(d)(3) The lease or disposal of real property by the 
Agency which meets either of two specified criteria, including whether 
the lease or disposal is controversial for environmental reasons. Lease 
or disposal of real property is a CE in Sec.  1940.310(e)(6)) and is 
proposed for inclusion in Sec.  1970.53(a)(5). This proposed CE 
includes a provision that specifies if ``such [servicing] actions 
involve foreseeable future changes, the Agency will classify the action 
according to this part and the appropriate level of environmental 
review will be prepared prior to the approval of such action.'' The 
potential for environmental controversy is included as an extraordinary 
circumstance in Sec.  1970.52.
    The existing Class I EA regulations require an EA for any Federal 
action that is defined as a categorical exclusion but which is 
controversial for environmental reasons (Sec.  1940.311(d)(1)). In the 
proposed regulations, the Agency has included ``environmental 
controversy'' as an extraordinary circumstance that would cause a 
normally categorically excluded action to require the preparation of an 
EA (or if necessary an EIS).
    Some Class I EA actions are not included in the proposed rule. Such 
actions are not included because these actions fall within the 
jurisdiction of the FSA and are not eligible for Agency financing. 
These are:
    Sec.  1940.311(c)(2) Financial assistance for the development of 
farm ponds or lakes more than 5 acres in size, but no more than 10 
acres, provided that no wetlands are affected.
    Sec.  1940.311(c)(5) Financial assistance for the conversion of 
more than 160 acres of pasture to agricultural production, but no more 
than 320 acres, provided that in a conversion to agricultural 
production no wetlands are affected, in which case the application will 
fall under Class II as defined in Sec.  1940.312 of this subpart.
    Sec.  1940.311(c)(6) Financial assistance to grazing associations.
    One existing Electric Program CE (Sec.  1794.22(a)(10)) will now 
require an EA under the proposed rule. This action relates to the 
construction of new water supply wells not located within the 
boundaries of an existing well field or generating station site. 
Currently, it is a CE that would require the applicant to submit an ER 
as documentation. Given the level of documentation now required under 
the proposed rule (Sec.  1970.54), which is less than a full ER, and 
the potential for significant impacts on the public water supply (e.g., 
extensive drawdown from withdrawals) and on existing water quality 
(e.g., aquifer degradation), the Agency believes that an EA is more 
appropriate for the development of new commercial or industrial wells. 
Thus, under the proposed rule, this type of proposed action would 
require an EA. This approach is consistent with existing EA classes of 
action relating to wells in 7 CFR 1940.312 (Class II EAs) and with two 
proposed CEs in Sec.  1970.53: Sec.  1970.53(c)(5), for non-commercial 
(residential, farm/livestock) wells; and Sec.  1970.53(c)(6), for 
modifications in an existing water well field, where no drawdown (other 
than immediate vicinity) or aquifer degradation would occur.
    With respect to the Class II EA actions under Sec.  1940.312, the 
following will either be eligible for a CE or require an EA under the 
proposed rule, depending on the size of the area affected:
    Sec.  1940.312(a)(1) Financial assistance for a multi-family 
housing project, including labor housing, which comprises more than 25 
units. Under the proposed rule, if such a facility would be 10 acres or 
less and there were no extraordinary circumstances, this action would 
be considered a CE under proposed Sec.  1970.54(a)(1). The basis for 
CEs under proposed Sec.  1970.54(a) is the size of the potentially 
affected area (less than 10 acres) rather than the number of units.
    Finally, the following Class II EA actions are not proposed for 
inclusion in the proposed rule because these actions fall within the 
jurisdiction of the FSA and are not eligible for Agency financing:
    Sec.  1940.312(c)(2) Financial assistance for the development of 
farm ponds or lakes either larger than 10 acres in size or for any 
smaller size that would affect a wetland;
    Sec.  1940.312(c)(4) Financial assistance for the construction or 
enlargement of aquaculture facilities;
    Sec.  1940.312(c)(5) Financial assistance for the conversion of 
more than 320 acres of pasture to agricultural production or for any 
smaller conversion of pasture to agricultural production that affects a 
wetland;
    The remaining Class I and Class II EA actions in Sec. Sec.  
1940.311 and 1970.312 (except for those noted above), and all of the 
EAs listed in Sec. Sec.  1794.23 and 1794.24, will continue to require 
EAs under the proposed 7 CFR part 1970 (see Table 5).
    In addition to eliminating the distinction between different 
classes of EAs, the proposed rule would eliminate the descriptions of 
the types of actions that typically require the preparation of an EA. 
Instead, the proposed rule would require that an EA be prepared for all 
Agency actions that do not fall within the list of CEs in 7 CFR part 
1970, subpart B or within the list of actions for which an EIS must be 
prepared in 7 CFR part 1970, subpart D. In addition, an EA (or an EIS 
if required) would be prepared for a normally categorically excluded 
action if there were extraordinary circumstances. The Agency determined 
that requiring the preparation of EAs for those applications for 
financial assistance that are not eligible for a CE, but for which an 
EIS is not necessarily required, will meet the requirements of NEPA and 
other applicable environmental requirements and provide certainty to 
Agency staff, applicants, and other interested parties.
Preparation of EAs (Sec.  1970.102)
    This proposed section describes the required contents of an EA. It 
also describes how an EA is normally processed within the Agency, 
including the responsibilities of the Agency and the applicant. In sum, 
the proposed section provides for a single, streamlined process that 
all Agency programs will follow in preparing, considering, i.e., 
reviewing and accepting applicant provided documentation, and 
publishing EAs.
    The proposed section is similar to the existing Sec. Sec.  1940.318 
and 1940.319 (Class II and Class I EAs respectively), although 
references to Farmers Home Administration forms have been removed as 
obsolete because the farm-related functions of the Agency were 
transferred to the FSA in 1995. In addition, the Agency believes that 
much of the information in these sections explain internal EA 
preparation procedures which are better placed in staff instruction.
    Environmental Reports, under the existing RUS regulations, are 
prepared by applicants and normally serve as the EA following RUS 
review and approval. Information regarding the preparation of 
Environmental Reports in Sec. Sec.  1794.41 and 1794.53 is not included 
in the proposed rule because such reports are specific to RUS. However 
applicant

[[Page 6766]]

documentation requirements are listed in Sec. Sec.  1970.5, 1970.51, 
and 1970.102.
    The Agency is proposing to require a 14- to 30-day public review 
and comment period for all EAs. While past Agency practice under 7 CFR 
part 1794 has been to allow a 30-day review period, the Agency 
determined that codifying the requirement is appropriate and that a 30-
day comment period would not always be necessary. For example, a 14-day 
comment period could be appropriate for a proposed action with limited 
impacts in a small area for which there is no public concern. A large, 
complex proposal that has raised public concerns would warrant a 30-day 
comment period. CEQ regulations require some level of public 
involvement during the preparation of EAs (see Section IV.B.2.b, 
above). The Agency proposes to meet this standard by requiring EAs to 
be made available for public review and comment while maintaining 
flexibility and expediency in the EA process.
Supplementing EAs (Sec.  1970.103)
    This proposed section is new and identifies the conditions under 
which a supplement to an EA will be required. There are no analogous 
sections in 7 CFR parts 1940 or 1794. The CEQ regulations describe 
requirements for supplementing EISs. The Agency has determined that it 
is good policy, and meets the letter and spirit of NEPA, to supplement 
an EA when changed circumstances warrant a re-evaluation of potential 
environmental impacts.
Finding of No Significant Impact (Sec.  1970.104)
    This proposed section provides that the Agency may issue a FONSI 
only if the EA supports a finding that the proposed action will not 
have a significant impact on the human environment. This is the 
standard that is set forth in the CEQ NEPA regulations. If the EA does 
not support a FONSI, the Agency will proceed to prepare an EIS.
    The proposed section also addresses what information the FONSI must 
include and requires that the Agency ensure that the applicant has 
committed to any mitigation necessary to support the FONSI and 
possesses the authority and ability to fulfill those commitments. If 
mitigation is needed to support a FONSI, mitigation must be a condition 
of financial assistance.
    Although the existing Agency NEPA regulations discuss FONSIs in 
various sections (Sec. Sec.  1940.318, 1940.319, 1794.43 and 1794.54), 
the requirements contained in this proposed section have no analogous 
provisions in the existing regulations. The proposed requirements are 
being added to clarify when a FONSI would be published and its required 
contents. The proposed requirement that the mitigation that is 
necessary to support a FONSI be a condition of financial assistance is 
being added in order to be consistent with recent CEQ guidance on 
mitigation and monitoring (Appropriate Use of Mitigation and Monitoring 
and Clarifying the Appropriate Use of Mitigated Findings of No 
Significant Impact, January 14, 2011, as found at: http://ceq.hss.doe.gov/current_developments/new_ceq_nepa_guidance.html.

D. Subpart D--Environmental Impact Statements

General (Sec.  1970.151)
    This proposed section describes the purpose of an EIS and lists six 
specific Agency actions for which an EIS will be required. The list is 
not exclusive; other Agency actions not listed may require the 
preparation of an EIS in certain circumstances. Failure to achieve 
compliance with this part will postpone further consideration of the 
applicant's proposal until such compliance is achieved or the applicant 
withdraws the application. If compliance is not achieved, the Agency 
will deny the request for financial assistance.
    The specific Agency actions listed in the proposed section are 
similar to those in Sec.  1794.25. However, in Sec.  1794.25, water and 
waste and telecommunications programs are identified as actions not 
normally requiring the preparation of an EIS, although the Agency's 
environmental review process is used to identify those proposed actions 
for which the preparation of an EIS is necessary. Based on Agency 
experience, these actions have not typically required the preparation 
of an EIS. For this reason, the Agency is proposing that these types of 
actions should be the subject of EAs.
    The inclusion of a specific list of actions in this proposed 
section differs significantly from Sec.  1940.33, which indicates that 
a detailed listing cannot be identified given the variability of the 
types and locations of actions taken by the Agency. Rather, the 
existing regulation relies on the EA process to identify, on a case-by-
case basis, those actions for which an EIS is necessary, and includes a 
detailed list of actions in Sec. Sec.  1940.311 and 1940.312 for Class 
I and Class II EA actions.
    In its proposed NEPA rule, the Agency has determined that a better 
approach is to specifically identify those actions that are eligible 
for a CE (see subpart B) and those that require the preparation of an 
EIS. All other actions will require the preparation of an EA (see 
subpart C) to determine whether the potential environmental impacts may 
be significant. The proposed approach gives Agency staff and applicants 
a clear understanding of the type of NEPA review that will be required 
for particular proposals, with all others requiring the preparation of 
an EA.
    With respect to the proposed Agency actions identified in this 
proposed section, the basis for their inclusion is as follows:
    (1) Proposals for which an EA was initially prepared and that may 
result in significant impacts that cannot be mitigated: this is 
consistent with the CEQ regulations that require the preparation of an 
EIS if an agency, after preparing an EA, concludes that the potential 
environmental impacts may be significant.
    (2) Siting, construction (or expansion), and decommissioning of 
major treatment, storage, and disposal facilities for hazardous wastes 
as designated in 40 CFR part 261: This is consistent with DOE Appendix 
D to subpart D of part 1021, D11.
    (3) Proposals that change or convert the land use of parcels 
greater than 640 acres in area: (DOI DM 516 11.8 B7)
    (4) New electric generating facilities other than gas-fired 
combustion turbines of more than 50 average MW output, and all new 
associated electric transmission facilities shall be covered in an EIS. 
This is currently included in Sec.  1794.25(a)(1).
    (5) New mining operations when the applicant has effective control 
(i.e., applicant's dedicated mine or purchase of a substantial portion 
of the mining equipment): This is currently included in Sec.  
1794.25(a)(2).
    (6) Agency proposals for legislation that may have a significant 
environmental impact: This is consistent with the CEQ NEPA regulations 
(40 CFR 1506.8).
EIS Funding and Professional Services (Sec.  1970.152)
    This proposed section provides that, unless otherwise approved by 
the Agency, an applicant must fund the preparation of an EIS and any 
supplemental documentation prepared in support of an applicant's 
proposal. The section provides that it is the Agency's responsibility 
to determine the scope and content of the NEPA documents to be prepared 
by any third-party contractors.
    As indicated in the CEQ regulations, an EIS may be prepared by a 
contractor selected by the Agency and paid by the applicant. However, 
the Agency must

[[Page 6767]]

exercise control over the scope, content, and development of the EIS 
(40 CFR 1506.5(c)). The selected contractor is required to execute the 
necessary disclosures, indicating that the contractor has no interest 
in the results of the EIS.
    Under the proposed third-party contracting arrangement, the 
applicant is required to fund the preparation of the EIS by the 
contractor that the Agency selects. The applicant is responsible for 
procurement and contracting while the Agency is responsible for 
directing the work of the contractor and for determining the scope and 
content of the EIS.
    As is the case with many Federal agencies entering into third-party 
contracting agreements, such an arrangement is typically described in 
an agreement among the Agency, the EIS contractor, and the applicant. 
The proposed rule provides that these agreements will describe each 
party's role and responsibilities during the EIS process. Further, the 
proposed rule requires that a disclosure statement be prepared by the 
Agency and executed by each third-party contractor performing 
environmental services. This disclosure statement requires the 
contractor to certify that it has no interest in the outcome of the 
EIS.
    Although the funding and contractual responsibilities will be 
required of applicants, the proposed rule will not change the current 
Agency responsibilities for EIS preparation. The Agency would still be 
responsible for selecting the EIS contractor and for the scope and 
content of the EIS prepared by the EIS contractor. The Agency would 
also prepare the scope of work and technical evaluation criteria for 
use in the solicitation package for evaluating contractor submittals 
for the preparation of the EIS.
    Currently, existing Sec.  1940.336(d) authorizes the Agency to 
secure outside professional services to assist in completing EISs in a 
direct Federal procurement in accordance with the Federal Acquisition 
Regulations. However, such regulation contains no provision requiring 
applicants to fund those professional services. Because the Federal 
procurement process can be lengthy and create burdens on Agency 
administrative staff, this section has been proposed to transfer the 
EIS procurement and funding burden to applicants to reduce the Agency's 
burden and costs.
    Section 18 of the Rural Electrification Act of 1936, as amended 
(the RE Act), and existing 7 CFR part 1789 allow applicants under the 
RE Act to fund the preparation of an EIS by a third-party contractor, 
if the applicant elects to do so. However, unlike under the proposed 
Sec.  1970.152, a consultant hired under Section 18 of the RE Act is 
the client of the Agency, not the client of the applicant. This 
proposed section would not change the current practice of permitting an 
Agency acting under Section 18 of the RE Act and 7 CFR part 1789 from 
using a consultant funded by an applicant who consents to paying for 
such consultant.
Notice of Intent and Scoping (Sec.  1970.153)
    This proposed section requires the Agency to publish a Notice of 
Intent (NOI) in the Federal Register that an EIS will be prepared and 
that one or more scoping meetings may be held. In addition, the 
applicant is required to publish a similar notice in at least one 
newspaper of local circulation, or provide similar information through 
other distribution methods as approved by the Agency.
    The proposed section describes the content of the NOI and the 
scoping activities that the Agency will undertake, such as informing 
Federal, state, and local agencies and tribes of the proposal.
    The proposed section primarily consolidates requirements in the 
existing Sec. Sec.  1940.320(c), 1940.331(b), 1794.51, and 1794.52. 
Much of the information provided in Sec.  1794.52 relating to scoping 
meetings has been included in Sec.  1970.14 on public involvement. The 
Agency has also determined that much of the detailed information 
pertaining to the scoping process and public notice requirements found 
in 7 CFR part 1940 outline internal procedures and are not included in 
the proposed rule. To avoid redundancy, the Agency is also proposing to 
remove existing provisions that merely restate CEQ regulations.
Preparation of the EIS (Sec.  1970.154)
    This proposed section provides that EISs will be prepared in 
accordance with the format outlined in the CEQ NEPA-implementing 
regulations using an interdisciplinary approach. The proposed section 
describes the process the Agency will use to file the draft and final 
EISs with EPA's Office of Federal Activities, publish a Notice of 
Availability of the draft and final EISs in the Federal Register, 
consider public comments received on the draft EIS, and respond to 
public comments in the final EIS. It also identifies applicant 
responsibilities for publishing announcements and support in responding 
to comments.
    The proposed section primarily consolidates requirements in the 
existing Sec. Sec.  1940.320 and 1794.61. In addition, some portions of 
Sec.  1970.320 are not included in this proposed section because they 
are either included elsewhere in the proposed rule (Responsibility in 
Sec.  1940.320(a) and Scoping process in Sec.  1940.320(c)), or refer 
to internal procedures that are better suited to staff instruction 
(Organizing the EIS process in Sec.  1940.329(b)).
Supplementing EISs (Sec.  1970.155)
    This proposed section provides that a supplement to a draft or 
final EIS will be announced, prepared, and circulated in the same 
manner (exclusive of meetings held during the scoping process) as a 
draft and final EIS. The proposed section also describes the 
circumstances in which a supplemental EIS will be prepared and provides 
that the Agency will publish an NOI to prepare a supplement to a draft 
or final EIS.
    The proposed section consolidates and revises requirements in the 
existing Sec. Sec.  1940.323 and 1794.62. The proposed section is 
consistent with Sec.  1940.323, although the details found in Sec.  
1970.323(b), (c) and (d) relating to changes in circumstance where a 
Class II EA may be prepared, coordination between the preparer and 
approving official, and other internal procedures and are not included 
in the proposed rule. Reference to an information supplement (Sec.  
1794.62(c)) is not included in the proposed regulation because it is 
specific to RUS and internal procedure.
Record of Decision (Sec.  1970.156)
    This proposed section provides a definition of the Record of 
Decision (ROD) and provides a reference to 40 CFR 1505.2 that describes 
the contents of a ROD. Notices informing the public of the availability 
of the ROD will be published in the Federal Register. The ROD may be 
signed no sooner than 30 days after the publication of EPA's Notice of 
Availability of the final EIS in the Federal Register.
    The proposed section consolidates requirements in the existing 
Sec. Sec.  1940.322 and 1794.63. The proposed section expands the 
existing regulations to address requirements related to the publication 
of a ROD. These requirements were added to clarify the Agency's 
environmental review process and to that ensure the Agency's 
regulations would be consistent with CEQ regulations (40 CFR 1506.10).

[[Page 6768]]

Executive Order 12866

    This proposed rule has been reviewed under Executive Order (EO) 
12866 and has been determined to be not significant by the Office of 
Management and Budget. The EO defines a ``significant regulatory 
action'' as one that is likely to result in a rule that may: (1) Have 
an annual effect on the economy of $100 million or more or adversely 
affect, in a material way, the economy, a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, or tribal governments or communities; (2) 
Create a serious inconsistency or otherwise interfere with an action 
taken or planned by another agency; (3) Materially alter the budgetary 
impact of entitlements, grants, user fees, or loan programs or the 
rights and obligations of recipients thereof; or (4) Raise novel legal 
or policy issues arising out of legal mandates, the President's 
priorities, or the principles set forth in this EO.
    The Agency determined that this regulation involves combining two 
existing intra-Agency regulations that supplement the NEPA procedures 
of the Council on Environmental Quality and the NHPA procedures of the 
Council on Historic Preservation that are established bodies of 
technical regulations which the Agency must necessarily update 
routinely to keep the regulations operationally current. The Agency has 
concluded that the net effect of the rule will be beneficial due to the 
streamlining and updated adherence to statutes and, therefore, does not 
warrant preparation of a regulatory evaluation as the anticipated 
impact is positive.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act 1995 (UMRA) of 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 
Agency 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 Agency 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 proposed rule would consolidate and update the Agency's 
existing rules governing compliance with NEPA to better align the 
Agency's regulations, particularly its categorical exclusions, with its 
current activities and recent experiences, and update the provisions 
with respect to current programs and regulatory requirements. The 
proposed rule would result in no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, and tribal 
governments or the private sector of $100 million or more in any one 
year. Accordingly, no assessment or analysis is required under the 
Unfunded Mandates Reform Act of 1995.

National Environmental Policy Act

    In this rule, the Agency proposes amendments that modify and 
clarify procedures for considering the environmental effects of the 
Agency's actions within the agencies' decision making process, thereby 
enhancing compliance with the letter and spirit of NEPA. The Agency has 
reviewed 7 CFR part 1940, subpart G, ``Environmental Program'' and part 
1794, ``Environmental Policies and Procedures'' and determined that 
this rule qualifies for categorical exclusion (CE) under 7 CFR 
1940.310(e)(3) and 7 CFR 1794.21(a)(1), because it is a strictly 
procedural rulemaking and no extraordinary circumstances exist that 
require further environmental analysis. Therefore, the Agency has 
determined that promulgation of this rule is not a major Federal action 
significantly affecting the quality of the human environment within the 
meaning of NEPA, and does not require an Environmental Assessment (EA) 
or Environmental Impact Statement (EIS).

Executive Order 12988, Civil Justice Reform

    This proposed rule has been reviewed under E.O. 12988, 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 the regulations of 
the Department of Agriculture's National Appeals Division (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.

Executive Order 13132, Federalism

    The Agency has examined this proposed rule and determined, under 
E.O. 13132, ``Federalism,'' that this does not have sufficient 
federalism implications to warrant the preparation of a Federalism 
Assessment. The provisions contained in this proposed rule would not 
preempt State law and would not have a substantial direct effect on the 
States, on the relationship between the national government and the 
States, or on the distribution of power and responsibilities among the 
various levels of government. No further action is required by E.O. 
13132.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-602) (RFA) generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act, or any other statute, unless the Agency 
certifies that the rule will not have an economically significant 
impact on a substantial number of small entities. Small entities 
include small businesses, small organizations, and small governmental 
jurisdictions.
    In compliance with the RFA, the Agency has determined that this 
proposed rule will not have a significant economic impact on a 
substantial number of these small entities for the reasons explained 
below. Consequently, the Agency has not prepared a regulatory 
flexibility analysis. This determination is based on the purpose of 
this regulation, which is to streamline the environmental review for 
proposed actions, resulting in a decrease in the burdens associated 
with carrying out such reviews. The estimated number of applications to 
be submitted to Agency for all programs during the fiscal years 2012 
through 2014 is an average of 120,283 applications per year. Of that 
total, some 89% are classified as private individuals, 4% are 
classified as private, non-individuals, and 7% are classified as State, 
local, and Tribal governments. Of the 4% classified as private, non-
individuals, some 80%, or 3,845 applicants would be classified as small 
business entities affected by the proposed 1970 regulations. However, 
the proposed revisions included in this rule are expected to reduce the 
aggregate amount of environmental documentation required from 
applicants due primarily to decreased RUS CE documentation requirements 
and decreased numbers of EAs required for all programs. This results 
from: (1) Proposed new CEs based upon the Agency's extensive experience 
over many years under both existing Agency NEPA rules in completing EAs 
for those actions resulting in findings of no

[[Page 6769]]

significant effect, and (2) reduction in the amount of information 
required under the RUS existing NEPA rule by applicants for CEs. In 
addition, the only impacts are on those who choose to participate in 
Agency programs, whereby small entity applicants will not be affected 
to a greater extent than individuals or large entity applicants.

Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    The Agency analyzed this rule under Executive Order 13211, Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use. We have determined that it is not a ``significant 
energy action'' under that order because it is not a ``significant 
regulatory action'' under Executive Order 12866 and is not likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy. The Agency has not designated it as a significant energy 
action and therefore, does not require a Statement of Energy Effects 
under Executive Order 13211.

Executive Order 12372, Intergovernmental Review of Federal Programs

    This rule is not subject to the provisions of E.O. 12372, which 
require intergovernmental consultation with State and local officials, 
because this rule provides general guidance on NEPA and related 
environmental reviews of applicants' proposals. Applications for Agency 
programs will be reviewed individually under E.O. 12372 as required by 
program procedures.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    The Agency has determined that this proposed rule does have a 
substantial direct effect on one or more Indian tribe(s) or on either 
the relationship or the distribution of powers and responsibilities 
between the Federal Government and Indian tribes. Thus, this rule is 
subject to the requirements of Executive Order 13175. Consequently, 
USDA will host a series of webinars and toll-free teleconferences based 
tribal consultation sessions that will be scheduled concurrently with 
the comment period of this proposed rule. The Agency believes this is 
the most cost effective way to consult with tribes on this rule and 
will allow maximum participation from tribal leaders or their 
designees.
    Additionally, the Agency will respond in a timely and meaningful 
manner to all Tribal government requests for consultation concerning 
this rule. The policies contained in this rule do not have implications 
that preempt Tribal law.

Programs Affected

    The Agency's programs affected by this proposed rulemaking are 
shown in the Catalog of Federal Domestic Assistance (CFDA) with numbers 
as indicated:

 
------------------------------------------------------------------------
               CFDA No.                           Program title
------------------------------------------------------------------------
10.350...............................  Technical Assistance to
                                        Cooperatives.
10.352...............................  Value-Added Producer Grants.
10.405...............................  Farm Labor Housing Loans and
                                        Grants.
10.411...............................  Rural Housing Site Loans and Self-
                                        Help Housing Land Development
                                        Loans.
10.415...............................  Rural Rental Housing Loans.
10.420...............................  Rural Self-Help Housing Technical
                                        Assistance.
10.427...............................  Rural Rental Assistance Payments.
10.433...............................  Rural Housing Preservation
                                        Grants.
10.441...............................  Technical and Supervisory
                                        Assistance Grants.
10.442...............................  Housing Application Packaging
                                        Grants.
10.446...............................  Rural Community Development
                                        Initiative.
10.760...............................  Water and Waste Disposal Systems
                                        for Rural Communities.
10.761...............................  Technical Assistance and Training
                                        Grants.
10.762...............................  Solid Waste Management Grants.
10.763...............................  Emergency Community Water
                                        Assistance Grants.
10.766...............................  Community Facilities Loans and
                                        Grants.
10.767...............................  Intermediary Relending Program.
10.768...............................  Business and Industry Loans.
10.769...............................  Rural Business Enterprise Grants.
10.770...............................  Water and Waste Disposal Loans
                                        and Grants (Section 306C).
10.771...............................  Rural Cooperative Development
                                        Grants.
10.773...............................  Rural Business Opportunity
                                        Grants.
10.781...............................  Water and Waste Disposal Systems
                                        for Rural Communities--ARRA.
10.788...............................  Very Low to Moderate Income
                                        Housing Loans--Direct.
10.789...............................  Very Low to Moderate Income
                                        Housing Loans--Guaranteed.
10.850...............................  Rural Electrification Loans and
                                        loan guarantees.
10.851...............................  Rural Telephone Loans and Loan
                                        guarantees.
10.854...............................  Rural Economic Development Loans
                                        and Grants.
10.855...............................  Distance Learning and
                                        Telemedicine Loans and Grants.
10.856...............................  1890 Land Grant Institutions
                                        Rural Entrepreneurial Outreach
                                        Program.
10.857...............................  State Bulk Fuel Revolving Fund
                                        Grants.
10.858...............................  RUS Denali Commission Grants and
                                        Loans.
10.859...............................  Assistance to High Energy Cost-
                                        Rural Communities.
10.861...............................  Public Television Station Digital
                                        Transition Grant Program.
10.863...............................  Community Connect Grant Program.
10.864...............................  Grant Program to Establish a Fund
                                        for Financing Water and
                                        Wastewater Projects.
10.886...............................  Rural Broadband Access Loans and
                                        Loan Guarantees.
------------------------------------------------------------------------


[[Page 6770]]

    All active CDFA programs can be found at www.cfda.gov under 
Department of Agriculture, Rural Development. Programs not listed in 
this section or not listed on the CDFA Web site but are still being 
serviced by the Agency will nevertheless be covered by the requirements 
of this action.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, the Agency 
will seek OMB approval of the reporting and recordkeeping requirements 
contained in this proposed rule and hereby opens a 60-day public 
comment period.
    Title: Environmental Policies and Procedures.
    OMB Number: 0575-AC56.
    Type of Request: New collection.
    Abstract: consists of the Rural Housing Service, Rural Utilities 
Service, and Rural Business-Cooperative Service, hereafter referred as 
the Agency. The Agency is consolidating, simplifying, and updating the 
different Agency environmental requirements into common environmental 
policies and procedures. The proposed rule, 7 CFR part 1970, Subparts A 
through D, will replace 7 CFR part 1794 (the current RUS Environmental 
Policies and Procedures) and 7 CFR part 1940-G, Environmental Program 
(the current RHS/RBS environmental regulation). The revised and 
consolidated policies and procedures will implement the National 
Environmental Policy Act (NEPA), other applicable environmental 
requirements, and supplement the Council on Environmental Quality (CEQ) 
Regulations for implementing the procedural provisions of NEPA. This 
action is taken to improve both the efficiency and the effectiveness of 
the Agency's environmental review processes.
    The information required under the proposed rule is similar to much 
of the information currently being required under the two existing 
regulations. Under these regulations, the current information being 
collected is approved under OMB control numbers 0572-0117 and 0575-
0094. The proposed rule, however, is changing the level of information 
required from lenders or borrowers, depending upon the level of 
environmental review determined for a specific project, or category of 
projects.
    Proposed Sec.  1970.54 defines as categorically excluded for NEPA 
review purposes proposals that are smaller scale in nature, but 
requires applicants to provide sufficient information to determine 
there are no extraordinary circumstances that would disqualify the 
proposal from being considered a CE.
    Proposed Sec.  1970.55 establishes as CEs Agency actions related to 
intermediaries. It requires applicants to provide sufficient 
information to determine there are no extraordinary circumstances that 
would disqualify the proposal from being considered a CE.
    Proposed Sec. Sec.  1970.101 and 102 establish and define Agency 
actions that would ordinarily require NEPA review on the level of an 
EA. It provides the requirements that pertain to the circumstances, 
preparation, review, and approval processes for EAs. The Agency will 
require an applicant to prepare an EA for those proposals which 
normally require the services of a design professional. In addition, 
these sections require applicants to provide site-specific 
environmental information on the proposed project, information on 
alternatives to the proposed project, if applicable, and to describe 
any mitigation actions proposed for the project. Applicants are also 
required to prepare and publish public notices to inform the public and 
other interested parties of the availability of the EA for review and 
comment, and provide all public comments and responses to the Agency, 
as appropriate.
    Proposed Sec.  1970.103 establishes a process for supplementing 
existing EAs, as needed. It requires applicants to provide any new 
information needed to supplement an existing EA in light of changes to 
the proposal.
    Proposed Sec.  1970.104 provides that the Agency may issue a 
Finding of No Significant Impact (FONSI), when the EA supports a 
finding that the proposed action will not have a significant effect on 
the human environment. The environmental review process for an EA is 
complete when a FONSI is issued. This section requires an applicant to 
prepare and publish public notices to inform the public and other 
interested parties of the availability of the FONSI.
    Proposed Sec.  1970.151 sets forth those actions that require the 
preparation of an Environmental Impact Statement (EIS).
    Proposed Sec.  1970.152 requires applicants to fund the preparation 
of an EIS, and provides for selecting and procuring environmental 
professional services to prepare an EIS. It expressly provides that the 
Agency may use consultants procured by applicants as approved by the 
Agency.
    Proposed Sec.  1970.153 requires applicants to publish a Notice of 
Intent to prepare an EIS and to support the Agency's scoping process.
    Proposed Sec.  1970.154 establishes the process for preparing an 
EIS and requires the applicant to publish public notices announcing the 
availability of the EIS, and to support the Agency in responding to all 
public comments.
    Proposed Sec.  1970.155 establishes Agency policy for Supplemental 
EIS's. It requires the applicant to provide information on any 
substantial change in its proposal and to notify the Agency when there 
is new environmental information relevant to the proposed action that 
would affect the EIS.
    Proposed Sec.  1970.155 establishes a process to prepare a Record 
of Decision (ROD) for all EISs and requires an applicant to publish 
public notices on the availability of the ROD.
    The information requirements contained in the proposed rule require 
lenders and applicants, as applicable, to provide the Agency with 
environmental information. This information is vital to the Agency's 
ability to fulfill its responsibilities and ensure compliance under 
NEPA and other applicable environmental laws, regulations, and 
executive orders
    The following estimates are based on the predicted average burden 
over the first three years the program is in place.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 92 hours per response.
    Respondents: Rural developers, farmers and ranchers, rural 
businesses, public bodies, local governments, lenders.
    Estimated Number of Respondents: 4,429.
    Estimated Number of Responses per Respondent: 1.
    Estimated Number of Responses: 4,429.
    Estimated Total Annual Burden (hours) on Respondents: 407,062.
    Copies of this information collection may be obtained from Jeanne 
Jacobs, Regulations and Paperwork Management Branch, Support Services 
Division, U.S. Department of Agriculture, Rural Development, STOP 0742, 
1400 Independence Ave. SW., Washington, DC 20250-0742 or by calling 
(202) 692-0043.
    Comments: Comments are invited on: (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 new Agency estimate of 
the burden of the proposed collection of information, including the 
validity of the methodology and assumptions used; (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 
those who respond, including the use of

[[Page 6771]]

appropriate automated, electronic, mechanical, or other technological 
collection techniques or other forms of information technology. 
Comments may be sent to Jeanne Jacobs, Regulations and Paperwork 
Management Branch, U.S. Department of Agriculture, Rural Development, 
STOP 0742, 1400 Independence Ave. SW., Washington, DC 20250. All 
responses to this proposed rule will be summarized and included in the 
request for OMB approval. All comments will also become a matter of 
public record.

Review Under E-Government Act Compliance

    The Agency is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

List of Subjects

7 CFR Part 1703

    Community development, Grant programs-education, Grant programs--
health, Grant programs--housing and community development, Loan 
programs--housing and community development, Reporting and 
recordkeeping requirements, Rural areas.

7 CFR Part 1709

    Administrative practice and procedure, Electric utilities, Grant 
programs--energy, Rural areas.

7 CFR Part 1710

    Electric power, Electric power rates, Loan programs--energy, 
Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 1717

    Administrative practice and procedure, Electric power, Electric 
utilities, Intergovernmental relations, Investments, Loan programs--
energy, Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 1720

    Electric power, Electric utilities, Loan programs--energy, 
Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 1721

    Electric power, Loan programs--energy, Rural areas.

7 CFR Part 1724

    Electric power, Loan programs--energy, Reporting and recordkeeping 
requirements, Rural areas.

7 CFR Part 1726

    Electric power, Loan programs--energy, Reporting and recordkeeping 
requirements, Rural areas.

7 CFR Part 1737

    Loan programs--communication, Reporting and recordkeeping 
requirements, Rural areas.

7 CFR Part 1738

    Broadband, Loan programs--communications, Rural areas, 
Telecommunications, Telephone.

7 CFR Part 1739

    Broadband, Grant programs--communications, Rural areas, 
Telecommunications, Telephone.

7 CFR Part 1740

    Communications, Grant programs--digital televisions, Rural areas, 
Television.

7 CFR Part 1753

    Communications equipment, Loan programs--communications, Reporting 
and recordkeeping requirements, Rural areas, Telephone.

7 CFR Part 1774

    Community development, Grant programs, Reporting and recordkeeping 
requirements, Rural areas, Waste treatment and disposal, Water supply.

7 CFR Part 1775

    Business and industry, Community development, Community facilities, 
Grant programs--housing and community development, Reporting and 
recordkeeping requirements, Rural areas, Waste treatment and disposal, 
Water supply, Watersheds.

7 CFR Part 1779

    Loan programs--housing and community development, Rural areas, 
Waste treatment and disposal, Water supply.

7 CFR Part 1780

    Community development, Community facilities, Grant programs--
housing and community development, Loan programs--housing and community 
development, Reporting and recordkeeping requirements, Rural areas, 
Waste treatment and disposal, Water supply, Watersheds.

7 CFR Part 1781

    Community development, Community facilities, Loan programs--housing 
and community development, Reporting and recordkeeping requirements, 
Rural areas, Waste treatment and disposal, Water supply, Watersheds.

7 CFR Part 1782

    Accounting, Appeal procedures, Auditing, Debts, Delinquency, Grant 
programs--agriculture, Insurance, Loan programs--agriculture, Reporting 
and recordkeeping requirements.

7 CFR Part 1794

    Environmental Impact Statements.

7 CFR Part 1924

    Agriculture, Construction management, Construction and repair, 
Energy Conservation, Housing, Housing Standards, Loan programs--
agriculture, Low and moderate income housing, Rural housing.

7 CFR Part 1940

    Administrative practice and procedure, Agriculture, Grant 
programs--housing and community development, Loan programs--
agriculture.

7 CFR Part 1942

    Business and industry, Community development, Community facilities, 
Grant programs--housing and community development, Industrial park, 
Loan programs--housing and community development, Loan security, Rural 
areas, Waste treatment and disposal--domestic, Water supply--domestic.

7 CFR Part 1944

    Administrative practice and procedure, Grant programs--housing and 
community development, Home improvement, Loan programs--housing and 
community development, Migrant labor, Nonprofit organizations, 
Reporting and recordkeeping requirements, Rural housing.

7 CFR Part 1948

    Business and industry, Coal, Community development, Community 
facilities, Energy, Grant programs--housing and community development, 
Housing, Planning, Rural areas, Transportation.

7 CFR Part 1951

    Accounting servicing, Grant programs--housing and community 
development, Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 1955

    Government acquired property, Government property management, Sale

[[Page 6772]]

of government acquired property, Surplus government property.

7 CFR Part 1962

    Crops, Government property, Livestock, Loan programs--agriculture, 
Rural areas.

7 CFR Part 1980

    Home improvement, Loan programs--rural development assistance, Loan 
programs--housing and community development, Mortgage insurance, 
Mortgages, Rural areas.

7 CFR Part 3550

    Administrative practice and procedure, Conflict of interests, 
Environmental impact statements, Equal credit opportunity, Fair 
housing, Grant programs--housing and community development, Housing.

7 CFR Part 3560

    Accounting, Administrative practice and procedure, Aged, Conflict 
of interests, Government property management, Grant programs--housing 
and community development, Insurance, Loan programs--agriculture, Loan 
programs--housing and community development, Low and moderate income 
housing, Migrant labor, Mortgages, Nonprofit organizations, Public 
housing, Rent subsidies, Reporting and recordkeeping requirements, 
Rural areas.

7 CFR Part 3565

    Conflict of interests, Credit, Environmental impact statements, 
Fair housing, Government procurement, Guaranteed loans, Hearing and 
appeal procedures, Housing standards, Lobbying, Low and moderate income 
housing, Manufactured homes, Mortgages.

7 CFR Part 3570

    Accounting, Account servicing, Administrative practice and 
procedure, Conflicts of interests, Debt restructuring, Environmental 
impact statements, Foreclosure, Fair Housing, Government property 
management, Grant programs--housing and community development, Loan 
programs--housing and community development, Reporting and 
recordkeeping requirements, Rural areas, Sale of government acquired 
property, Subsidies.

7 CFR Part 3575

    Community facilities, Guaranteed loans, Loan programs.

7 CFR Part 4274

    Community development, Economic Development, Loan programs--
business, Rural areas.

7 CFR Part 4279

    Loan programs--business and industry, Loan Programs--rural 
development assistance, Rural areas.

7 CFR Part 4280

    Direct loan programs, Economic development, Energy, Energy 
efficiency improvements, Grant programs, Guaranteed loan programs, Loan 
programs--business and industry, Renewable energy systems, Rural areas.

7 CFR Part 4284

    Business and industry, Economic development, Community development, 
Community facilities, Grant programs--Housing and community 
development, Loan programs--Housing and community development, Loan 
security, Rural areas.

7 CFR Part 4287

    Loan Programs--Business and industry, Loan Programs--Rural 
development assistance, Rural areas.
    For the reasons set forth in the preamble, chapters XVII, XVIII, 
XXXV and XLII of Subtitle B, title 7, Code of Federal Regulations are 
proposed to be amended as follows:

Subtitle B--Regulations of the Department of Agriculture

CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE

PART 1703--RURAL DEVELOPMENT

0
1. The authority citation for part 1703 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq. and 950aaa et seq.

Subpart E--[AMENDED]

0
2. Amend Sec.  1703.125 by revising paragraph (j) to read as follows:


Sec.  1703.125  Completed application.

* * * * *
    (j) Environmental impact and historic preservation. The applicant 
must provide details of the project's impact on the environment and 
historic preservation, in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures,'' which contains the Agency's 
policies and procedures for implementing a variety of Federal statutes, 
regulations, and Executive orders generally pertaining to the 
protection of the quality of the human environment. The application 
must contain a separate section entitled ``Environmental Impact of the 
Project.''
* * * * *

Subpart F--[AMENDED]

0
3. Amend Sec.  1703.134 by revising paragraph (h) to read as follows:


Sec.  1703.134  Completed application.

* * * * *
    (h) Environmental impact and historic preservation. The applicant 
must provide details of the project's impact on the environment and 
historic preservation, in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures,'' which contains the Agency's 
policies and procedures for implementing a variety of Federal statutes, 
regulations, and Executive orders generally pertaining to the 
protection of the quality of the human environment. The application 
must contain a separate section entitled ``Environmental Impact of the 
Project.''
* * * * *

Subpart G--[AMENDED]

0
4. Amend Sec.  1703.144 by revising paragraph (h) to read as follows:


Sec.  1703.144  Completed application.

* * * * *
    (h) Environmental impact and historic preservation. The applicant 
must provide details of the project's impact on the environment and 
historic preservation, in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures,'' which contains the Agency's 
policies and procedures for implementing a variety of Federal statutes, 
regulations, and Executive orders generally pertaining to the 
protection of the quality of the human environment. The application 
must contain a separate section entitled ``Environmental Impact of the 
Project.''
* * * * *

PART 1709--ASSISTANCE TO HIGH ENERGY COST COMMUNITIES

0
5. The authority citation for part 1709 continues to read as follows:

    Authority: 5 U.S.C. 301, 7 U.S.C. 901 et seq.

Subpart A--[AMENDED]

0
6. Amend Sec.  1709.17 by revising paragraphs (a) and (c) to read as 
follows:


Sec.  1709.17  Environmental review.

    (a) All grants made under this subpart are subject to the 
requirements of 7 CFR part 1970, ``Environmental Policies and 
Procedures.''
* * * * *
    (c) Projects that are selected for grant awards by the 
Administrator will be reviewed by the Agency in accordance with 7 CFR 
part 1970, ``Environmental

[[Page 6773]]

Policies and Procedures,'' prior to final award approval. The Agency 
may require the selected applicant to submit additional information, as 
may be required, concerning the proposed project in order to complete 
the required reviews and to develop any project-specific conditions for 
the final grant agreement.

Subpart B--[AMENDED]

0
7. Amend Sec.  1709.117 by revising paragraph (b)(12) to read as 
follows:


Sec.  1709.117  Application requirements.

* * * * *
    (b) * * *
    (12) Environmental information. The application must include 
information about project characteristics and site specific conditions 
that may involve environmental, historic preservation and other 
resource issues. This information must be presented in sufficient 
detail so as to facilitate the Agency's identification of projects that 
may require additional environmental review in accordance with 7 CFR 
part 1970, ``Environmental Policies and Procedures,'' before a final 
grant award can be approved.
* * * * *
0
8. Amend Sec.  1709.124 by revising paragraph (a) to read as follows:


Sec.  1709.124  Grant award procedures.

    (a) Notification of applicants. The Agency will notify all 
applicants in writing whether they have been selected for a grant 
award. Applicants that have been selected as finalists for a 
competitive grant award will be notified in writing of their selection 
and advised that the Agency may request additional information in order 
to complete the required environmental review in accordance with 7 CFR 
part 1970, ``Environmental Policies and Procedures,'' and to meet other 
pre-award conditions.
* * * * *

PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO 
ELECTRIC LOANS AND GUARANTEES

0
9. The authority citation for part 1710 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart C--[AMENDED]

0
10. Revise Sec.  1710.117 to read as follows:


Sec.  1710.117  Environmental considerations.

    Borrowers are required to comply with 7 CFR part 1970, 
``Environmental Policies and Procedures'' and other applicable 
environmental laws, regulations and Executive orders.

Subpart D--[AMENDED]

0
11. Amend Sec.  1710.152 by revising paragraph (d) to read as follows:


Sec.  1710.152  Primary support documents.

* * * * *
    (d) Environmental Information. This documentation is used to 
determine what effect the construction of the facilities included in 
the construction work plan will have on the environment. A borrower 
must follow the policy and procedural requirements set forth in 7 CFR 
part 1970, ``Environmental Policies and Procedures.''

Subpart F--[AMENDED]

0
12. Amend Sec.  1710.250 by revising paragraph (i) to read as follows:


Sec.  1710.250  General.

* * * * *
    (i) A borrower's CWP or special engineering studies must be 
supported by the appropriate level of environmental review 
documentation, as set forth in 7 CFR part 1970, ``Environmental 
Policies and Procedures.''
* * * * *

Subpart I--[AMENDED]

0
13. Amend Sec.  1710.401 by revising paragraph (c)(2)(iii) to read as 
follows:


Sec.  1710.401  Loan application documents.

* * * * *
    (c) * * *
    (2) * * *
    (iii) Environmental documentation in accordance with 7 CFR part 
1970, ``Environmental Policies and Procedures'';
* * * * *

PART 1717-POST--LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND 
GUARANTEED ELECTRIC LOANS

0
14. The authority citation for part 1717 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart R--[AMENDED]

0
15. Amend Sec.  1717.850 by revising paragraph (d) to read as follows:


Sec.  1717.850  General.

* * * * *
    (d) Environmental considerations. The environmental requirements of 
7 CFR part 1970, ``Environmental Policies and Procedures,'' apply to 
applications for lien accommodations, subordinations, and lien 
releases.
* * * * *
0
16. Amend Sec.  1717.855 by revising paragraph (f) to read as follows:


Sec.  1717.855  Application Contents: Advance approval--100 percent 
private financing of distribution, subtransmission and headquarters 
facilities and certain other community infrastructure.

* * * * *
    (f) Environmental documentation, in accordance with 7 CFR part 
1970, ``Environmental Policies and Procedures;''
* * * * *

PART 1720--GUARANTEES FOR BONDS AND NOTES ISSUED FOR 
ELECTRIFICATION OR TELEPHONE PURPOSES

0
17. The authority citation for part 1720 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq.; 7 U.S.C. 940C.

0
18. Add Sec.  1720.16 as follows:


Sec.  1720.16  Environmental review.

    All guarantees made under this subpart are subject to the 
requirements of 7 CFR part 1970, ``Environmental Policies and 
Procedures.''

PART 1721-POST--LOAN POLICIES AND PROCEDURES FOR INSURED ELECTRIC 
LOANS

0
19. The authority citation for part 1721 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq.; 1921 et seq.; and 6941 et seq.

Subpart A--[AMENDED]

0
20. Amend Sec.  1721.1 by revising paragraph (c) introductory text to 
read as follows:


Sec.  1721.1  Advances.

* * * * *
    (c) Certification. Pursuant to the applicable provisions of the RUS 
loan contract, borrowers must certify with each request for funds to be 
approved for advance that such funds are for projects in compliance 
with this section and must also provide for those that cost in excess 
of $100,000, a contract or work order number as applicable and a CWP 
cross-reference project coded identification number.
* * * * *

[[Page 6774]]

PART 1724--ELECTRIC ENGINEERING, ARCHITECTURAL SERVICES AND DESIGN 
POLICIES AND PROCEDURES

0
21. The authority citation for part 1724 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart A--[AMENDED]

0
22. Revise Sec.  1724.9 to read as follows:


Sec.  1724.9  Environmental compliance.

    Borrowers must comply with the requirements of 7 CFR part 1970, 
``Environmental Policies and Procedures.''

PART 1726--ELECTRIC SYSTEM CONSTRUCTION POLICIES AND PROCEDURES

0
23. The authority citation for part 1726 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart A--[AMENDED]

0
24. Amend Sec.  1726.14 by revising the definition of ``Approval of 
proposed construction'' to read as follows:


Sec.  1726.14  Definitions.

* * * * *
    Approval of proposed construction means RUS approval of a 
construction work plan or other appropriate engineering study and RUS 
approval, for purposes of system financing, of the completion of all 
appropriate requirements of part 1970 of this chapter.
* * * * *
0
25. Revise Sec.  1726.18 to read as follows:


Sec.  1726.18  Pre-loan contracting.

    Borrowers must consult with RUS prior to entering into any contract 
for material, equipment, or construction if a construction work plan, 
loan, or loan guarantee for the proposed work has not been approved. 
While the RUS staff will work with the borrower in such circumstances, 
nothing contained in this part is to be construed as authorizing 
borrowers to enter into any contract before the availability of funds 
has been ascertained by the borrower and all the requirements of 7 CFR 
part 1970, ``Environmental Policies and Procedures,'' have been 
fulfilled.

PART 1737--PRE-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND 
GUARANTEED TELECOMMUNICATIONS LOANS

0
26. The authority citation for part 1737 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq.; Pub. L. 103-354, 
108 Stat. 3178 (7 U.S.C. 6941 et seq.).

Subpart C--[AMENDED]

0
27. Amend Sec.  1737.22 by revising paragraph (b)(4) to read as 
follows:


Sec.  1737.22  Supplementary information.

* * * * *
    (b) * * *
    (4) Environmental documentation in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''
* * * * *

Subpart E--[AMENDED]

0
28. Amend Sec.  1737.41 by revising paragraph (b)(2)(iii) to read as 
follows:


Sec.  1737.41  Procedure for obtaining approval.

* * * * *
    (b) * * *
    (2) * * *
    (iii) Evidence that the borrower has satisfied the applicable 
requirements of 7 CFR part 1970, ``Environmental Policies and 
Procedures.''
* * * * *

Subpart J--[AMENDED]

0
29. Amend Sec.  1737.90 by revising paragraph (a)(6) to read as 
follows:


Sec.  1737.90  Loan approval requirements.

    (a) * * *
    (6) All environmental requirements must be met (see 7 CFR part 
1970, ``Environmental Policies and Procedures'').
* * * * *

PART 1738--RURAL BROADBAND ACCESS LOANS AND LOAN GUARANTEES

0
30. The authority citation for part 1738 continues to read as follows:

    Authority: Pub. L. 107-171, 7 U.S.C. 901 et seq.

Subpart D--[AMENDED]

0
31. Amend Sec.  1738.156 by revising paragraph (a)(8) to read as 
follows:


Sec.  1738.156  Other Federal requirements.

* * * * *
    (a) * * *
    (8) 7 CFR part 1970, ``Environmental Policies and Procedures.''
* * * * *

Subpart E--[AMENDED]

0
32. Amend Sec.  1738.212 by revising paragraph (a)(9) to read as 
follows:


Sec.  1738.212  Network design.

    (a) * * *
    (9) Environmental documentation prepared in accordance with 7 CFR 
part 1970, ``Environmental Policies and Procedures''; and
* * * * *

Subpart F--[AMENDED]

0
33. Amend Sec.  1738.252 by revising paragraph (a) to read as follows:


Sec.  1738.252  Construction.

    (a) Construction paid for with broadband loan funds must comply 
with 7 CFR parts 1788 and 1970, RUS Bulletin 1738-2, and any other 
guidance from the Agency.
* * * * *

PART 1739--BROADBAND GRANT PROGRAM

0
34. The authority citation for part 1739 continues to read as follows:

    Authority: Title III, Pub. L. 108-199, 118 Stat. 3.

Subpart A--[AMENDED]

0
35. Amend Sec.  1739.15 by revising paragraph (l)(8) to read as 
follows:


Sec.  1739.15  Completed application.

* * * * *
    (l) * * *
    (8) Environmental documentation developed in accordance with 7 CFR 
part 1970, ``Environmental Policies and Procedures.''
* * * * *

PART 1740--PUBLIC TELEVISION STATION DIGITAL TRANSITION GRANT 
PROGRAM

0
36. The authority citation for part 1740 continues to read as follows:

    Authority: Consolidated Appropriations Act, 2005; Title III: 
Rural Development Programs; Rural Utilities Service; Distance 
Learning, Telemedicine, and Broadband Program; Public Law 108-447.

Subpart A--[AMENDED]

0
37. Amend Sec.  1740.9 by revising paragraph (k) to read as follows:


Sec.  1740.9  Grant application.

* * * * *
    (k) Environmental impact and historic preservation. The applicant 
must

[[Page 6775]]

provide details of the digital transition's impact on the environment 
and historic preservation, and comply with 7 CFR part 1970, 
``Environmental Policies and Procedures.'' Submission of environmental 
documentation alone does not constitute compliance with 7 CFR part 
1970.

PART 1753--TELECOMMUNICATIONS SYSTEM CONSTRUCTION POLICIES AND 
PROCEDURES

0
38. The authority citation for part 1753 continues to read as follows:

    Authority: 5 U.S.C. 501, 7 U.S.C. 901 et seq.

Subpart D--[AMENDED]

0
39. Amend Sec.  1753.25 by revising paragraph (f)(3) to read as 
follows:


Sec.  1753.25  General.

* * * * *
    (f) * * *
    (3) 7 CFR part 1970, ``Environmental Policies and Procedures,'' as 
well as with other laws, regulations, and Executive orders regarding 
environmental protection.
* * * * *

PART 1774--SPECIAL EVALUATION ASSISTANCE FOR RURAL COMMUNITIES AND 
HOUSEHOLDS PROGRAM (SEARCH)

0
40. The authority citation for part 1774 continues to read as follows:

    Authority: 7 U.S.C. 1926(a)(2)(C).

Subpart A--[AMENDED]

0
41. Revise Sec.  1774.7 to read as follows:


Sec.  1774.7  Environmental requirements.

    The policies and regulations contained in 7 CFR part 1970, 
``Environmental Policies and Procedures,'' apply to grants made in 
accordance with this part.
0
42. Amend Sec.  1774.8 by revising paragraph (d) to read as follows:


Sec.  1774.8  Other Federal statutes.

* * * * *
    (d) 7 CFR part 1970, ``Environmental Policies and Procedures.''
* * * * *

PART 1775--TECHNICAL ASSISTANCE GRANTS

0
43. The authority citation for part 1775 continues to read as follows:

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

Subpart A--[AMENDED]

0
44. Revise Sec.  1775.7 to read as follows:


Sec.  1775.7  Environmental requirements.

    The policies and regulations contained in 7 CFR part 1970, 
``Environmental Policies and Procedures,'' apply to grants made for the 
purposes in Sec. Sec.  1775.36 and 1775.66.
0
45. Amend Sec.  1775.8 by revising paragraph (d) to read as follows:


Sec.  1775.8  Other Federal statutes.

* * * * *
    (d) 7 CFR part 1970, ``Environmental Policies and Procedures.''
* * * * *

PART 1779--WATER AND WASTE DISPOSAL PROGRAMS GUARANTEED LOANS

0
46. The authority citation for part 1779 continues to read as follows:

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

0
47. Amend Sec.  1779.9 by revising the first sentence to read as 
follows:


Sec.  1779.9  Environmental requirements.

    Facilities to be financed must undergo an environmental impact 
analysis in accordance with 7 CFR part 1970, ``Environmental Policies 
and Procedures.'' * * *
0
48. Amend Sec.  1779.52 by revising paragraph (b)(3) to read as 
follows:


Sec.  1779.52  Processing.

* * * * *
    (b) * * *
    (3) Environmental documentation in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''
* * * * *

PART 1780--WATER AND WASTE LOANS AND GRANTS

0
49. The authority citation for part 1780 continues to read as follows:

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

Subpart B--[AMENDED]

0
50. Amend Sec.  1780.31 by revising paragraph (e) to read as follows:


Sec.  1780.31  General.

* * * * *
    (e) During the earliest discussion with prospective applicants, the 
Agency will advise prospective applicants on environmental requirements 
and evaluation of potential environmental consequences of the proposal. 
Pursuant to 7 CFR part 1970, ``Environmental Policies and Procedures,'' 
the environmental review requirements should be performed by the 
applicant simultaneously and concurrently with the proposal's 
engineering planning and design.
0
51. Amend Sec.  1780.33 by revising paragraph (f) introductory text to 
read as follows:


Sec.  1780.33  Application requirements.

* * * * *
    (f) Environmental documentation. The applicant must submit two 
copies of environmental documentation developed in accordance with 7 
CFR part 1970, ``Environmental Policies and Procedures.''
* * * * *

Subpart C--[AMENDED]

0
52. Revise Sec.  1780.55 to read as follows:


Sec.  1780.55  Preliminary engineering reports and environmental 
documentation.

    Preliminary engineering reports (PERs) must conform to customary 
professional standards. PER guidelines for water, sanitary sewer, solid 
waste, and storm sewer are available from the Agency. Environmental 
documentation must be provided in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''

PART 1782--SERVICING OF WATER AND WASTE PROGRAMS

0
53. The authority citation for part 1782 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1981; 16 U.S.C. 1005.

0
54. Revise Sec.  1782.9 to read as follows:


Sec.  1782.9  Environmental requirements.

    Servicing actions involving lease or sale of Agency-owned property 
will be reviewed for compliance with 7 CFR part 1970, ``Environmental 
Policies and Procedures.'' The appropriate environmental review will be 
completed prior to approval of the servicing action.

PART 1794--[REMOVED AND RESERVED]

0
55. Remove and reserve part 1794.

CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS--COOPERATIVES 
SERVICE, RURAL UTILITIES SERVICE AND FARM SERVICE AGENCY

PART 1924--CONSTRUCTION AND REPAIR

0
56. The authority citation for part 1924 will continue to read as 
follows:

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

0
57. Revise Sec.  1924.6 paragraph (a)(9) to read as the follows:

[[Page 6776]]

Sec.  1924.6  Performing development work.

* * * * *
    (a) * * *
    (9) Environmental requirements. The provisions of 7 CFR part 1970, 
``Environmental Policies and Procedures'' will apply to all loans and 
grants including those being assisted under the HUD section 8 housing 
assistance payment program for new construction.
* * * * *

Subpart A--[AMENDED]

0
58. Amend Exhibit J to Subpart A of Part 1924, Part A, section II by 
revising the third paragraph to read as follows:

Exhibit J to Subpart A of Part 1924--Manufactured Home Sites, Rental 
Projects and Subdivisions: Development, Installation and Setup

* * * * *
    Part A * * *
    II. * * *
    Part 7 CFR 1970, ``Environmental Policies and Procedures'' of 
this chapter applies on scattered sites, in subdivisions and rental 
projects to the development, installation and set-up of manufactured 
homes. To determine the level of environmental analysis required for 
a particular application, each manufactured home or lot involved 
will be considered as equivalent to one housing unit or lot. The 
implementation of Agency environmental policies and the 
consideration of important land use impacts are of particular 
relevance in the review of proposed manufactured home sites and in 
achieving the two purposes highlighted below. Because of the 
development, installation and set-up of manufactured home 
communities, including scattered sites, rental projects, and 
subdivisions, differ in some requirements from conventional site and 
subdivision development; two of the purposes of this exhibit are to:
* * * * *

0
59. Amend Exhibit J to Subpart A of Part 1924, Part A, section V by 
revising paragraph (B)(3) to read as follows:

Exhibit J to Subpart A of Part 1924--Manufactured Home Sites, Rental 
Projects and Subdivisions: Development, Installation and Setup

* * * * *
    Part A * * *
    V. * * *
    B. * * *
    3. 7 CFR part 1970, ``Environmental Policies and Procedures.''
* * * * *

0
60. Amend Exhibit J to Subpart A of Part 1924, Part B by revising 
paragraph (I)(C) to read as follows:

Exhibit J to Subpart A of Part 1924--Manufactured Home Sites, Rental 
Projects and Subdivisions: Development, Installation and Setup

* * * * *
    Part B * * *
    I. * * *
    C. The finished grade elevation beneath the manufactured home or 
the first flood elevation of the habitable space, whichever is 
lower, must be above the 100-year return frequency flood elevation. 
This requirement applies wherever manufactured homes may be 
installed, not just in locations designated by the National Flood 
Insurance Program as areas of special flood hazards. The use of fill 
to accomplish this is a last resort. As is stated in EO 11988 and 7 
CFR part 1970, ``Environmental Policies and Procedures,'' it is the 
Agency's policy not to approve or fund any proposal in a 100-year 
floodplain area unless there is no practicable alternative to such a 
floodplain location.
* * * * *

Subpart C--[AMENDED]

0
61. Amend Exhibit C to Subpart C of Part 124 by revising paragraph 
(I)(A) to read as follows:

Exhibit C to Subpart C of Part 1924--Checklist of Visual Exhibits and 
Documentation for RRH, RCH and LH Proposals

* * * * *
    I. * * *
    A. Environmental Information. Documentation regarding the 
proposed project's environmental effects, in accordance with 7 CFR 
part 1970, ``Environmental Policies and Procedures'' as applicable. 
Guidance concerning assembly of the information is available at any 
Agency office or on the Agency's Web site.
* * * * *

PART 1942--ASSOCIATIONS

0
62. The authority citation for part 1942 continues to read as follows:

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

Subpart A--[AMENDED]

0
63. Amend Sec.  1942.17 by revising paragraph (j)(7) to read as 
follows:


Sec.  1942.17  Community facilities.

* * * * *
    (j) * * *
    (7) Environmental requirements. Environmental requirements will be 
documented by the Agency in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''
* * * * *
0
64. Amend Sec.  1942.18 by revising paragraph (d)(1) to read as 
follows:


Sec.  1942.18  Community facilities--Planning, bidding, contracting, 
constructing.

* * * * *
    (d) * * *
    (1) Natural resources. Facility planning should be responsive to 
the owner's needs and should consider the long-term economic, social 
and environmental needs as set forth in this section. The Agency's 
environmental considerations are under 7 CFR part 1970, ``Environmental 
Policies and Procedures.''
* * * * *

Subpart C--[AMENDED]

0
65. Revise Sec.  1942.105 to read as follows:


Sec.  1942.105  Environmental review.

    The Agency must conduct and document an environmental review for 
each proposed project in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.'' The review should be 
completed as soon as possible after receipt of an application. The loan 
approving official must determine an adequate environmental review has 
been completed before requesting an obligation of funds.

Subpart G--[AMENDED]

0
66. Amend Sec.  1942.310 by revising paragraph (b) to read as follows:


Sec.  1942.310  Other considerations.

* * * * *
    (b) Environmental requirements. The requirements of 7 CFR part 
1970, ``Environmental Policies and Procedures,'' apply to this subpart.
* * * * *

PART 1944--HOUSING

0
67. The authority citation for Part 1944 continues to read as follows:

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

Subpart I--[AMENDED]

0
68. Amend Sec.  1944.410 by revising paragraphs (b)(1)(ii) and (c)(1) 
to read as follows:


Sec.  1944.410  Processing preapplications, applications, and 
completing grant dockets.

* * * * *
    (b) * * *
    (1) * * *
    (ii) As appropriate, an original and one copy of environmental 
documentation as outlined in 7 CFR part 1970, Exhibit B-2, ``Guidance 
to Applicants for Preparing Environment Reports'' or Exhibit C-2, 
``Guidance to

[[Page 6777]]

Applicants for Preparing Environmental Assessments.''
* * * * *
    (c) Form AD-622, ``Notice of Preapplication Review Action.'' (1) If 
the applicant is eligible and after the State Director has returned the 
preapplication information and as appropriate, the an original and one 
copy of environmental documentation as outlined in 7 CFR part 1970, 
Exhibit B-2, ``Guidance to Applicants for Preparing Environment 
Reports'' or Exhibit C-2, ``Guidance to Applicants for Preparing 
Environmental Assessments.'' to the District Office, the District 
Director will, within 10 days, prepare and issue Form AD-622. The 
original Form AD-622 will be signed and delivered to the applicant 
along with the letter of conditions, a copy to the applicant's case 
file, a copy to the County Supervisor, and a copy to the State 
Director.
* * * * *

Subpart K--[AMENDED]

0
69. Amend Sec.  1944.526 by revising the heading and paragraphs (a)(5), 
(b)(1)(i), and (c)(1)(i) to read as follows:


Sec.  1944.526  Preapplication procedures.

    (a) * * *
    (5) An original and one copy of environmental documentation 
specified in 7 CFR part 1970, ``Environmental Policies and 
Procedures.''
    (b) * * *
    (1) * * *
    (i) Complete any required environmental review procedures as 
specified in 7 CFR part 1970, ``Environmental Policies and 
Procedures,'' and attach to the application.
* * * * *
    (c) * * *
    (1) * * *
    (i) Make a determination regarding the appropriate level of 
environmental review in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''
* * * * *
0
70. Amend Sec.  1944.531 by revising the heading, paragraph (c)(10), 
removing paragraph (c)(11), and redesignating paragraphs (c)(12) and 
(c)(13) as paragraphs (c)(11) and (c)(12) respectively, to read as 
follows:


Sec.  1944.531  Application submission.

* * * * *
    (c) * * *
    (10) Environmental documentation in accordance with 7 CFR part 
1970, ``Environmental Policies and Procedures.''
* * * * *
0
71. Amend Exhibit B to Subpart K of Part 1944 by revising paragraph 
(A)(4) to read as follows:

EXHIBIT B TO SUBPART K OF PART 1944--ADMINISTRATIVE INSTRUCTIONS FOR 
STATE OFFICES REGARDING THEIR RESPONSIBILITIES IN THE ADMINISTRATION OF 
THE TECHNICAL AND SUPERVISORY ASSISTANCE GRANT PROGRAM

    A. * * *
    4. As appropriate, environmental documentation as outlined in 7 
CFR part 1970, Exhibit B-2, ``Guidance to Applicants for Preparing 
Environment Reports'' or Exhibit C-2, ``Guidance to Applicants for 
Preparing Environmental Assessments.''
* * * * *
0
72. Amend Exhibit C to Subpart K of Part 1944 by revising paragraph 
(A)(4) to read as follows:

EXHIBIT C TO SUBPART K OF PART 1944--INSTRUCTIONS FOR DISTRICT OFFICES 
REGARDING THEIR RESPONSIBILITIES IN THE ADMINISTRATION OF THE TECHNICAL 
AND SUPERVISORY ASSISTANCE GRANT PROGRAM

    A. * * *
    4. As appropriate, environmental documentation as outlined in 7 CFR 
part 1970, Exhibit B-2, ``Guidance to Applicants for Preparing 
Environment Reports'' or Exhibit C-2, ``Guidance to Applicants for 
Preparing Environmental Assessments.''
* * * * *

Subpart N--[AMENDED]

0
73. Revise Sec.  1944.672 to read as follows:


Sec.  1944.672  Environmental Requirements.

    Part 1970 of this chapter will be followed regarding environmental 
requirements. The approval of an HPG grant for the repair, 
rehabilitation, or replacement of dwellings shall be classified as a 
Categorical Exclusion, pursuant to Sec.  1970.53. As part of their 
preapplication materials, applicants shall submit environmental 
documentation in accordance with 7 CFR part 1970, ``Environmental 
Policies and Procedures,'' for the geographical areas proposed to be 
served by the program. The applicant shall refer to Exhibit F-1 of this 
subpart (available in any Rural Development State or District Office) 
for guidance.
0
74. Revise Sec.  1944.676(c) to read as follows:


Sec.  1944.676  Preapplication procedures.

* * * * *
    (c) The application must submit as appropriate, an original and one 
copy of environmental documentation as outlined in 7 CFR part 1970, 
Exhibit B-2, ``Guidance to Applicants for Preparing Environment 
Reports'' or Exhibit C-2, ``Guidance to Applicants for Preparing 
Environmental Assessments,'' in accordance with exhibit F-1 of this 
subpart.
* * * * *

PART 1948--RURAL DEVELOPMENT

Subpart B--Section 601 Energy Impacted Area Development Assistance 
Program

0
75. The authority citation for part 1948, subpart B continues to read 
as follows:

    Authority:  Section 601, Pub. L. 95-620, delegation of authority 
by the Sec. of Agri., 7 CFR 2.23; delegation of authority by the 
Asst. Sec. for Rural Development, 7 CFR 2.70.

0
76. Amend Sec.  1948.84 by revising paragraphs (d)(8) and (i)(13), 
removing paragraph (i)(14), and redesignating paragraphs (i)(15), 
(i)(16), and (i)(17) as paragraphs (i)(14), (i)(15), and (i)(16) 
respectively, to read as follows:


Sec.  1948.84  Application procedure for site development and 
acquisition grants.

* * * * *
    (d) * * *
    (8) As appropriate, an original and one copy of environmental 
documentation as outlined in 7 CFR part 1970, Exhibit B-2, ``Guidance 
to Applicants for Preparing Environment Reports'' or Exhibit C-2, 
``Guidance to Applicants for Preparing Environmental Assessments.''
* * * * *
    (i) * * *
    (13) Environmental documentation in accordance with 7 CFR part 
1970, ``Environmental Policies and Procedures.''
* * * * *

PART 1951--SERVICING AND COLLECTIONS

0
77. The authority citation for part 1951 is revised to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1932 note; 7 U.S.C. 1989; 31 
U.S.C. 3716; 42 U.S.C. 1480.

Subpart R--[AMENDED]

0
78. Amend Sec.  1951.872 by revising paragraph (b) to read as follows:


Sec.  1951.872  Other regulatory requirements.

* * * * *
    (b) Environmental requirements. (1) Unless specifically modified by 
this

[[Page 6778]]

section, the requirements of 7 CFR part 1970, ``Environmental Policies 
and Procedures,'' apply to this subpart. Intermediaries and ultimate 
recipients of loans must consider the potential environmental impacts 
of their projects at the earliest planning stages and develop plans to 
minimize the potential to adversely impact the environment.
    (2) Environmental documentation will be provided in accordance with 
7 CFR part 1970, ``Environmental Policies and Procedures.''
* * * * *

PART 1955--PROPERTY MANAGEMENT

0
79. The authority citation for part 1955 continues to read as follows:

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

Subpart B--[AMENDED]

0
80. Amend Sec.  1955.63 by revising paragraph (b) to read as follows:


Sec.  1955.63  Suitability determination.

* * * * *
    (b) Grouping and subdividing farm properties. To the maximum extent 
practicable, the Agency will maximize the opportunity for beginning 
farmers and ranchers to purchase inventory properties. Farm properties 
may be subdivided or grouped according to Sec.  1955.140, as feasible, 
to carry out the objectives of the applicable loan program. Properties 
may also be subdivided to facilitate the granting or selling of a 
conservation easement or the fee title transfer of portions of a 
property for conservation purposes. The environmental effects of such 
actions, in conjunction with farm loan programs, will be considered 
pursuant to subpart G of part 1940 of this chapter. For rural 
development program actions, environmental effects will be considered 
in accordance with 7 CFR part 1970, ``Environmental Policies and 
Procedures.''
* * * * *

Subpart C--[AMENDED]

0
81. Amend Sec.  1955.136 by revising the heading and paragraphs (a) and 
(b) to read as follows:


Sec.  1955.136  Environmental requirements.

    (a) Environmental impact analyses in accordance with 7 CFR part 
1970 must be prepared prior to final decisions on disposal actions.
    (b) All environmental impact analyses shall address the 
requirements of Departmental Regulation 9500-3, ``Land Use Policy,'' in 
connection with the conversion to other uses of prime and unique 
farmlands, farmlands of statewide or local importance, the alteration 
of wetlands or flood plains, or the creation of nonfarm uses beyond the 
boundaries of existing settlements.
* * * * *
0
82. Amend Sec.  1955.137 by revising paragraph (a)(3)(i) to read as 
follows:


Sec.  1955.137  Real property located in special areas or having 
special characteristics.

    (a) * * *
    (3) Limitations placed on financial assistance. (i) Financial 
assistance is limited to property located in areas where flood 
insurance is available. Flood insurance must be provided at closing of 
loans on program-eligible and non-program (NP)-ineligible terms. 
Appraisals of property in flood or mudslide hazard areas will reflect 
this condition and any restrictions on use. Financial assistance for 
substantial improvement or repair of property located in a flood or 
mudslide hazard area is subject to the limitations outlined, for farm 
loan program actions, in, paragraph 3b (1) and (2) of Exhibit C of 
subpart G of part 1940 of this chapter and for rural development 
program actions in 7 CFR part 1970, ``Environmental Policies and 
Procedures.''
* * * * *
0
83. Amend Sec.  1955.140 by revising paragraph (a) to read as follows:


Sec.  1955.140  Sale in parcels.

    (a) Individual property subdivided. An individual property, other 
than Farm Loan Programs property, may be offered for sale as a whole or 
subdivided into parcels as determined by the State Director. For MFH 
property, guidance will be requested from the National Office for all 
properties other than RHS projects. When farm inventory property is 
larger than a family-size farm, the county official will subdivide the 
property into one or more tracts to be sold in accordance with Sec.  
1955.107. Division of the land or separate sales of portions of the 
property, such as timber, growing crops, inventory for small business 
enterprises, buildings, facilities, and similar items may be permitted 
if a better total price for the property can be obtained in this 
manner. Environmental effects related to farm loan program actions 
should also be considered pursuant to subpart G of part 1940 of this 
chapter. For rural development program actions, environmental effects 
should be considered in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''
* * * * *
0
84. Add part 1970 to read as follows:

PART 1970--ENVIRONMENTAL POLICIES AND PROCEDURES

Subpart A--Environmental Policies
1970.1 Purpose, applicability, and scope.
1970.2 [Reserved]
1970.3 Authority.
1970.4 Policies.
1970.5 Responsible parties.
1970.6 Definitions and acronyms.
1970.7 [Reserved]
1970.8 Actions requiring environmental review.
1970.9 Levels of environmental review.
1970.10 Raising the level of environmental review.
1970.11 Timing of the environmental review process.
1970.12 Limitations on actions during the NEPA process.
1970.13 Consideration of alternatives.
1970.14 Public involvement.
1970.15 Interagency cooperation.
1970.16 Mitigation.
1970.17 Programmatic analysis and tiering.
1970.18 Emergencies.
1970.19-1970.50 [Reserved]
Subpart B--NEPA Categorical Exclusions
1970.51 Applying CEs.
1970.52 Extraordinary circumstances.
1970.53 CEs involving no or minimal construction. 1970.54 CEs 
involving small-scale development.
1970.55 CEs for Multi-Tier Actions.
1970.56-1970.100 [Reserved]
Subpart C--NEPA Environmental Assessments
1970.101 General.
1970.102 Preparation of EAs.
1970.103 Supplementing EAs.
1970.104 Finding of No Significant Impact.
1970.105-1970.150 [Reserved]
Subpart D--NEPA Environmental Impact Statements
1970.151 General.
1970.152 EIS funding and professional services.
1970.153 Notice of intent and scoping.
1970.154 Preparation of the EIS.
1970.155 Supplementing EISs.
1970.156 Record of decision.
1970.157-1970.200 [Reserved]

    Authority: 7 U.S.C. 6941 et seq., 42 U.S.C. 4241 et seq.; 40 CFR 
parts 1500 through 1508; 5 U.S.C. 301; 7 U.S.C. 1989; and 42 U.S.C. 
1480.

Subpart A--Environmental Policies


Sec.  1970.1  Purpose, applicability, and scope.

    (a) Purpose. The purpose of this part is to ensure that the Agency 
complies with the National Environmental Policy Act of 1969, as amended 
(NEPA) (42 U.S.C. 4321, et seq.), and other applicable environmental 
requirements in order to make better decisions based on an 
understanding of the environmental consequences of proposed actions, 
and take actions that

[[Page 6779]]

protect, restore, and enhance the quality of the human environment.
    (b) Applicability. This part contains the environmental policies 
and procedures applicable to programs administered by the Rural Housing 
Service (RHS), Rural Business-Cooperative Service (RBS), and Rural 
Utilities Service (RUS); herein referred to as ``the Agency.''
    (c) Scope. This part integrates NEPA with other planning, 
environmental review processes, and consultation procedures required by 
other Federal laws, regulations, and Executive Orders applicable to 
Agency programs. This part also supplements the Council on 
Environmental Quality (CEQ) regulations implementing the procedural 
provisions of NEPA, 40 CFR parts 1500 through 1508. To the extent 
appropriate, the Agency will also take into account CEQ guidance and 
memoranda. This part will also incorporate and comply with the 
procedures of Section 106 (36 CFR 800.8) of the National Historic 
Preservation Act (NHPA) and Section 7 (50 CFR part 402) of the 
Endangered Species Act (ESA).


Sec.  1970.2  [Reserved]


Sec.  1970.3  Authority.

    This part derives its authority from a number of statutes, 
Executive orders, and regulations, including but not limited to those 
listed in this section. Both the Agency and the applicant, as 
appropriate, must comply with these statutes, Executive orders, and 
regulations, as well as any future statutes, Executive orders, and 
regulations that affect the Agency's implementation of this part.
    (a) National Environmental Policy Act of 1969 (42 U.S.C. 4321 et 
seq.);
    (b) Council on Environmental Quality Regulations Implementing the 
National Environmental Policy Act (40 CFR parts 1500 through 1508);
    (c) U.S. Department of Agriculture, NEPA Policies and Procedures (7 
CFR part 1b).
    (d) Department of Agriculture, Enhancement, Protection and 
Management of the Cultural Environment (7 CFR parts 3100 through 3199);
    (e) Archaeological and Historic Preservation Act of 1960, as 
amended, (16 U.S.C. 469 et seq.);
    (f) Archaeological Resources Protection Act of 1979 (16 U.S.C. 
470aa et seq.);
    (g) Bald and Golden Eagle Protection Act (16 U.S.C. 668 et seq.);
    (h) Clean Air Act (42 U.S.C. 7401 et seq.);
    (i) Clean Water Act (Federal Water Pollution Control Act, 33 U.S.C. 
1251 et seq.);
    (j) Coastal Barrier Resources Act (16 U.S.C. 3501 et seq.);
    (k) Coastal Barrier Improvement Act (42 U.S.C. 4028 et seq.);
    (l) Coastal Zone Management Act (16 U.S.C. 1456);
    (m) Comprehensive Environmental Response, Compensation, and 
Liability Act (42 U.S.C. 103) (CERCLA);
    (n) Consolidated Farm and Rural Development Act, Sections 
307(a)(6)(A) (7 U.S.C. 1927(a)(6)(A)) and 363 (7 U.S.C. 2006e);
    (o) Endangered Species Act of 1973 (16 U.S.C. 1531 et seq.);
    (p) Farmland Protection Policy Act (7 U.S.C. 4201 et seq.);
    (q) Historic Sites, Buildings and Antiquities Act (16 U.S.C. 461 et 
seq.);
    (r) Housing and Community Development Act of 1992 (42 U.S.C. 
542(c)(9));
    (s) Migratory Bird Treaty Act (16 U.S.C. 703-711);
    (t) National Historic Preservation Act (16 U.S.C. 470 et seq.);
    (u) National Trails System Act (16 U.S.C. 1241 et seq.);
    (v) Native American Graves Protection and Repatriation Act (25 
U.S.C. 3001 et seq.);
    (w) Noise Control Act (42 U.S.C. 4901 et seq.);
    (x) Pollution Prevention Act of 1990 (42 U.S.C. 13101 et seq.);
    (y) Resource Conservation and Recovery Act (42 U.S.C. 6901);
    (z) Safe Drinking Water Act--(42 U.S.C. 300f et seq.);
    (aa) Wild and Scenic Rivers Act (16 U.S.C. 1271 et seq.);
    (bb) Wilderness Act (16 U.S.C. 1131 et seq.);
    (cc) Compact of Free Association Between the United States and the 
Republic of the Marshall Islands and Between the United States and the 
Federated States of Micronesia (Public Law 108-188);
    (dd) Compact of Free Association Between the United States and the 
Republic of Palau (Public Law 99-658);
    (ee) Executive Order 11514, Protection and Enhancement of 
Environmental Quality;
    (ff) Executive Order 11593, Protection and Enhancement of the 
Cultural Environment;
    (gg) Executive Order 11988, Floodplain Management;
    (hh) Executive Order 11990, Protection of Wetlands;
    (ii) Executive Order 12898, Federal Actions to Address 
Environmental Justice in Minority Populations and Low Income 
Populations;
    (jj) Executive Order 12372, Intergovernmental Review;
    (kk) Executive Order 13112, Invasive Species;
    (ll) Executive Order 13175, Consultation and Coordination with 
Indian Tribal Governments;
    (mm) Executive Order 13186, Responsibilities of Federal Agencies to 
Protect Migratory Birds;
    (nn) Executive Order 13287, Preserve America;
    (oo) Executive Order 13016, Federal Support of Community Efforts 
along American Heritage Rivers;
    (pp) Executive Order 13352, Facilitation of Cooperative 
Conservation;
    (qq) Executive Order 13423, Strengthening Federal Environmental, 
Energy, and Transportation Management;
    (rr) Executive Order 13514, Federal Leadership in Environmental, 
Energy, and Economic Performance;
    (ss) Agriculture Departmental Regulation (DR) 5600-2, Environmental 
Justice;
    (tt) Agriculture Departmental Regulation (DR) 9500-3, Land Use 
Policy;
    (uu) Agriculture Departmental Regulation (DR) 9500-4, Fish and 
Wildlife Policy; and
    (vv) Agriculture Departmental Manual (DM) 5600-001, Environmental 
Pollution Prevention, Control, and Abatement Manual.


Sec.  1970.4  Policies.

    (a) Applicants proposals must, whenever practicable, avoid or 
minimize adverse environmental impacts; avoid or minimize conversion of 
wetlands and important farmlands as defined in the Farmland Protection 
Policy Act and its implementing regulations issued by the USDA Natural 
Resources Conservation Service; avoid development in floodplains when 
practicable alternatives exist to meet developmental needs; and avoid 
or minimize potentially high and adverse impacts to minority or low-
income populations within the proposed action's area of impact. 
Avoiding development in floodplains includes avoiding development in 
the 500-year floodplain, as shown on the Federal Emergency Management 
Agency's (FEMA) Flood Insurance Rate Maps, where the proposed actions 
and facilities are defined as critical actions in Sec.  1970.6. There 
are no exceptions to this policy and the Agency shall not fund the 
proposal unless there is a demonstrated, significant need for the 
proposal and no practicable alternative exists to the proposed 
conversion of the above resources.

[[Page 6780]]

    (b) The Agency encourages the reuse of real property defined as 
brownfields per Section 101 of CERCLA where the reuse of such property 
is complicated by the presence or potential presence of a hazardous 
substance, pollutant, or other contaminant, provided that the level of 
such does not threaten human health and the environment for the 
proposed land use. The Agency will defer to the agency with regulatory 
authority under the appropriate law in determining the appropriate 
level of contaminant for a specific proposed land use. The Agency will 
evaluate the risk based upon the applicable regulatory agency's review 
and concurrence with the proposal.
    (c) The Agency and applicant will involve other Federal agencies 
with jurisdiction by law or special expertise, state and local 
governments, Indian tribes and Alaska Native organizations, Native 
Hawaiian organizations, and the public, early in the Agency's 
environmental review process to the fullest extent practicable. To 
accomplish this objective, the Agency and applicant will:
    (1) Ensure that environmental amenities and values be given 
appropriate consideration in decision making along with economic and 
technical considerations;
    (2) At the earliest possible time, advise interested parties of the 
Agency's environmental policies and procedures and required 
environmental impact analyses during early project planning and design; 
and
    (3) Make environmental assessments (EA) and environmental impact 
statements (EIS) available to the public for review and comment in a 
timely manner.
    (d) The Agency and applicant will ensure the completion of the 
environmental review process prior to the irreversible and 
irretrievable commitment of Agency resources in accordance with Sec.  
1970.11. The environmental review process is concluded when the Agency 
approves the applicability of a Categorical Exclusion (CE), issues a 
Finding of No Significant Impact (FONSI), or issues a Record of 
Decision (ROD).
    (e) If an applicant's proposal does not comply with Agency 
environmental policies and procedures, further consideration of the 
application will be deferred until compliance can be demonstrated, or 
the application may be rejected. Any applicant that is directly and 
adversely affected by an administrative decision made by the Agency 
under this part may appeal that decision, to the extent permissible 
under 7 CFR part 11.
    (f) The Agency recognizes the worldwide and long-range character of 
environmental problems and, where consistent with the foreign policy of 
the United States, will lend appropriate support to initiatives, 
resolutions, and programs designed to maximize international 
cooperation in anticipating and preventing a decline in the quality of 
humankind's world environment in accordance with NEPA, 42 U.S.C. 4321 
et seq.
    (g) The Agency will use the NEPA process, to the maximum extent 
feasible, to identify and encourage opportunities to reduce greenhouse 
gas (GHG) emissions caused by proposed Federal actions that would 
otherwise result in the emission of substantial quantities of GHG.


Sec.  1970.5  Responsible parties.

    (a) Agency. The following paragraphs identify the general 
responsibilities of the Agency.
    (1) The Agency is responsible for all environmental decisions and 
findings related to its actions and will encourage applicants to design 
proposals to protect, restore, and enhance the environment.
    (2) If the Agency requires an applicant to submit environmental 
information, the Agency will outline the types of information and 
analyses required in guidance documents. The Agency will independently 
evaluate the information submitted.
    (3) The Agency will advise applicants and applicable lenders of 
their responsibilities to consider environmental issues during early 
project planning and that specific actions listed in Sec.  1970.12, 
such as initiation of construction, cannot occur prior to completion of 
the environmental review process or it could result in a denial of 
financial assistance.
    (4) The Agency may act as either a lead agency or a cooperating 
agency in the preparation of an environmental review document. If the 
Agency is a cooperating agency, the Agency will fulfill the cooperating 
agency responsibilities outlined in 40 CFR 1501.6.
    (5) Mitigation measures described in the environmental review 
documentation must be included as conditions in Agency financial 
commitment documents, such as a conditional commitment letter.
    (6) The Agency, guaranteed lender, or multi-tier recipients will 
monitor and track the implementation, maintenance, and effectiveness of 
any required mitigation measures.
    (b) Applicants. Applicants must:
    (1) Consult with Agency staff to determine the appropriate level of 
environmental review and to obtain publicly available resources at the 
earliest possible time for guidance in identifying all relevant 
environmental issues that must be addressed and considered during early 
project planning and design throughout the process.
    (2) Where appropriate, contact State and Federal agencies to 
initiate consultation on matters affected by this part. This part 
authorizes applicants to coordinate with State and Federal agencies on 
behalf of the Agency. However, applicants are not authorized to 
initiate consultation in accordance with Section 106 with Indian tribes 
on behalf of the Agency. In those cases, applicants need the express 
written authority of the Agency and consent of Indian tribes in order 
to initiate consultation.
    (3) Provide information to the Agency that the Agency deems 
necessary to evaluate the proposal's potential environmental impacts 
and alternatives.
    (i) Applicants must ensure that all required materials are current, 
sufficiently detailed and complete, and are submitted directly to the 
Agency office processing the application. Incomplete materials or 
delayed submittals may jeopardize consideration of the applicant's 
proposal by the Agency and may result in no award of financial 
assistance.
    (ii) Applicants must clearly define the purpose and need for the 
proposal and inform the Agency promptly if any other Federal, State, or 
local agencies may be involved in financing, permitting, or approving 
the proposal, so that the Agency may coordinate and consider 
participation in joint environmental reviews.
    (iii) As necessary, applicants must develop and document reasonable 
alternatives that meet their purpose and need while improving 
environmental outcomes.
    (iv) Applicants must prepare environmental review documents 
according to the format and standards provided by the Agency. The 
Agency must independently evaluate the final documents submitted. All 
environmental review documents must be objective, complete, and 
accurate in order for them to be finally accepted by the Agency. 
Applicants may employ a design or environmental professional or 
technical service provider to assist them in the preparation of their 
environmental review documents.
    (A) Applicants are not required to prepare environmental review 
documents for proposals that involve

[[Page 6781]]

limited, routine Agency activities listed in Sec.  1970.53.
    (B) For CEs listed in Sec.  1970.54, applicants must prepare 
environmental documentation as required.
    (C) When an EA is required, the applicant must prepare an EA that 
meets the requirements in subpart C of this part, including, but not 
limited to, information and data collection and public involvement 
activities. When the applicant prepares the EA, the Agency will make 
its own independent evaluation of the environmental issues and take 
responsibility for the scope and content of the EA.
    (D) Applicants must cooperate with and assist the Agency in all 
aspects of preparing an EIS that meets the requirements specified in 
subpart D of this part, including, but not limited to, information and 
data collection and public involvement activities. Once authorized by 
the Agency in writing, applicants are responsible for funding all 
third-party contractors used to prepare the EIS.
    (4) Applicants will provide any additional studies, data, or 
document revisions requested by the Agency during the environmental 
review and decision-making process. The studies, data, or documents 
required will vary depending upon the specific project and its impacts. 
Examples of studies that the Agency may require an applicant to provide 
are biological assessments under the ESA, archeological surveys under 
the NHPA, wetland delineations, surveys to determine the floodplain 
elevation on a site, air quality conformity analysis, or other such 
information needed to adequately assess impacts.
    (5) Applicants will ensure that no actions are taken (such as any 
demolition, land clearing, initiation of construction, or advance of 
interim construction funds from a guaranteed lender), including 
incurring any obligations with respect to their proposal, that may have 
an adverse impact on the quality of the human environment or that may 
limit the choice of reasonable alternatives during the environmental 
review process. Limitations on actions by an applicant prior to the 
completion of the Agency environmental review process are defined in 
CEQ regulations at 40 CFR 1506.1 and 7 CFR 1970.12.
    (6) Applicants will promptly notify the Agency processing official 
when changes are made to their proposal so that the environmental 
review and documentation may be supplemented or otherwise revised as 
necessary.
    (7) Applicants will incorporate any mitigation measures identified 
and any required monitoring in the environmental review process into 
the plans and specifications and construction contracts for the 
proposals. Applicants must provide such mitigation measures to 
consultants responsible for preparing design and construction 
documents, or provide other mitigation action plans. Applicants are 
required to maintain, as applicable, mitigation measures for the life 
of the loans or refund term for grants.
    (8) Applicants will cooperate with the Agency on achieving 
environmental policy goals. If an applicant is unwilling to cooperate 
with the Agency on environmental compliance, the Agency will deny the 
requested financial assistance.


Sec.  1970.6  Definitions and acronyms.

    (a) Definitions. Terms used in this part are defined in 40 CFR part 
1508, 36 CFR 800.16, and this section.
    Agency. USDA Rural Development, which includes RHS, RBS, and RUS, 
and any successor agencies.
    Applicant. An individual or entity requesting financial assistance 
including but not limited to loan recipients, grantees, guaranteed 
lenders, or licensees.
    Construction work plan. An engineering planning study that is used 
in the Electric Program to determine and document a borrower's 2- to 4-
year capital construction investments that are needed to provide and 
maintain adequate and reliable electric service to a borrower's new and 
existing members.
    Critical action. Any activity for which even a slight chance of 
flooding would be hazardous as determined by the Agency. Critical 
actions include activities that create, maintain, or extend the useful 
life of structures or facilities that produce, use, or store highly 
volatile, flammable, explosive, toxic, or water-reactive materials; 
maintain irreplaceable records; or provide essential utility or 
emergency services (such as data storage centers, electric generating 
facilities, water treatment facilities, wastewater treatment 
facilities, large pump stations, emergency operations centers including 
fire and police stations, and roadways providing sole egress from 
flood-prone areas); or facilities that are likely to contain occupants 
who may not be sufficiently mobile to avoid death or serious injury in 
a flood.
    Design professionals. Engineers or architects providing 
professional design services to applicants during the planning, design, 
and construction phases of proposals submitted to the Agency for 
financial assistance.
    Distributed resources. Sources of electrical power that are not 
directly connected to a bulk power transmission system, having an 
installed capacity of not more than 10 Mega volt-amperes (MVA), 
connected to an electric power system through a point of common 
coupling. Distributed resources include both generators (distributed 
generation) and energy storage technologies.
    Emergency. A disaster or a situation that involves an immediate or 
imminent threat to public health or safety as determined by the Agency.
    Environmental review. Any or all of the levels of environmental 
analysis described under this part.
    Financial assistance. A loan, grant, or loan guarantee provided by 
the Agency to an applicant.
    Guaranteed lender. The organization making, servicing, and/or 
collecting the loan which is guaranteed by the Agency under applicable 
regulations to the extent that such servicing and collecting has not 
been assigned to the Agency.
    Historic property. Any prehistoric or historic district, site, 
building, structure, or object included in, or eligible for inclusion 
in, the National Register of Historic Places maintained by the 
Secretary of the Interior. This term includes artifacts, records, and 
remains that are related to and located within such properties. The 
term includes properties of traditional religious and cultural 
importance to an Indian tribe or Native Hawaiian organization and that 
meet the National Register criteria. (See 36 CFR 800.16(l)).
    Indian tribe. An Indian tribe, band, nation, or other organized 
group or community, including a native village, regional corporation or 
village corporation, as those terms are defined in Section 3 of the 
Alaska Native Claims Settlement Act (43 U.S.C. 1602), which is 
recognized as eligible for the special programs and services provided 
by the United States to Indians because of their status as Indians. 
(See 36 CFR 800.16(m)).
    Loan-servicing actions. All Agency actions on a particular loan 
after loan closing or, in the case of guaranteed loans, after the 
issuance of the loan guarantee, including but not limited to transfers, 
assumptions, consents, subordinations, foreclosures, and sales or 
leases of Agency-owned real property obtained through foreclosure.
    Loan/System designs. Engineering studies to support a loan 
application and the determination that a system design provides 
telecommunication services most efficiently to proposed subscribers in 
a proposed service area, in accordance with the Telecommunications 
Program guidance.

[[Page 6782]]

    Multi-tier action. Refers to specific programs administered by the 
Agency that provide financial assistance to eligible recipients, 
including but not limited to: Intermediaries; community-based 
organizations, such as housing or community development non-profit 
organizations; rural electric cooperatives; or other organizations with 
similar financial arrangements who, in turn, provide financial 
assistance available to eligible recipients. The entities or 
organizations receiving the initial Agency financial assistance are 
considered ``primary recipients.'' As the direct recipient of this 
financial assistance, ``primary recipients'' provide the financial 
assistance to other parties, referred to as ``secondary recipients'' or 
``ultimate recipients.'' The multi-tier action programs include Housing 
Preservation Grants (42 U.S.C. 1490m), Multi-Family Housing 
Preservation Revolving Loan Fund (73 FR 48368), Intermediary Relending 
Program (7 U.S.C. 1932 note and 42 U.S.C. 9812), Rural Business 
Enterprise Grant Program (section 310B(c)(2) (Consolidated Farm and 
Rural Development Act)), Rural Economic Development Loan and Grant 
Program (7 U.S.C. 940c), Household Water Well System Grant Program (7 
U.S.C. 1926e), and any other such programs so identified in the future 
through Federal Register notice.
    No action alternative. An alternative that describes the reasonably 
foreseeable future environment in the event a proposed Federal action 
is not taken. This forms the baseline condition against which the 
impacts of the proposed action and other alternatives are compared and 
evaluated.
    Preliminary Architectural/Engineering Report. Documents prepared by 
the applicant's design professional in accordance with applicable 
Agency guidance for Preliminary Architectural Reports for housing, 
business, and community facilities proposals and for Preliminary 
Engineering Reports for water and wastewater proposals.
    Previously Disturbed or Developed Land. Land that has been changed 
such that its functioning ecological processes have been and remain 
altered by human activity.
    Third-party contracts. Refers to the preparation of EISs by 
contractors paid by the applicant. Under the Agency's direction and in 
compliance with 40 CFR 1506.5(c), the applicant may undertake the 
necessary paperwork for the solicitation of a field of candidates. 
Federal procurement requirements do not apply to the Agency because it 
incurs no obligations or costs under the contract, nor does the Agency 
procure anything under the contract.
    (b) Acronyms.

CE--Categorical Exclusion
CERCLA--Comprehensive Environmental Response, Compensation, and 
Liability Act
CEQ--Council on Environmental Quality
EA--Environmental Assessment
EIS--Environmental Impact Statement
EPA--United States Environmental Protection Agency
ESA--Endangered Species Act
FEMA--Federal Emergency Management Agency
FONSI--Finding of No Significant Impact
GHG--Greenhouse Gas
kV--kilovolt (kV)
kW--kilowatt (kW)
MW--megawatt
MVA--Mega volt-amperes
NEPA--National Environmental Policy Act
NHPA--National Historic Preservation Act
NOI--Notice of Intent
RBIC--Rural Business Investment Companies
RBS--Rural Business-Cooperative Service
RHS--Rural Housing Service
RUS--Rural Utilities Service
ROD--Record of Decision
SCADA--Supervisory Control and Data Acquisition Systems
SEPA--State Environmental Policy Act
USDA--United States Department of Agriculture
USGS--United State Geological Survey
USEPA--United States Environmental Protection Agency


Sec.  1970.7  [Reserved]


Sec.  1970.8  Actions requiring environmental review.

    (a) The Agency must comply with the requirements of NEPA for all 
major Federal actions within the:
    (1) United States borders and any other commonwealth, territory or 
possession of the United States such as Guam, American Samoa, U.S. 
Virgin Islands, the Commonwealth of the Northern Mariana Islands, and 
the Commonwealth of Puerto Rico; and
    (2) Republic of the Marshall Islands, the Federated States of 
Micronesia and the Republic of Palau, subject to applicable Compacts of 
Free Association.
    (b) Except as provided in paragraph (c) of this section, the Agency 
has determined the following to be major Federal actions:
    (1) Financial assistance;
    (2) Certain loan servicing actions with the potential to have an 
effect on the environment, as determined by the Agency, including, but 
not limited to:
    (i) Sale or lease of Agency-owned real property;
    (ii) Any form of consent including a consent to the release of a 
lien or security interest (except when the debt to the Agency is being 
paid in full); or
    (iii) Any request by a third party that the Agency accept the 
imposition of a lien or security interest of another creditor on assets 
previously pledged to the Agency;
    (3) Promulgation of procedures or regulations for new or 
significantly revised programs; and
    (4) Legislative proposals (see 40 CFR 1506.8).
    (c) For environmental review purposes, the Agency has identified 
and established categories of proposed actions (Sec. Sec.  1970.53 
through 1970.55, 1970.101, and 1970.151). An applicant may propose to 
participate with other parties in the ownership of a project. In such a 
case, the Agency shall determine whether the applicant participants 
have sufficient control and responsibility to alter the development of 
the proposed project prior to determining its classification. Where the 
applicant proposes to participate with other parties in the ownership 
of a proposed project and all applicants cumulatively own:
    (1) Five percent (5%) or less, the project is not considered a 
Federal action subject to this part;
    (2) Thirty-three and one-third percent (33\1/3\%) or more, the 
project shall be considered a federal action subject to this part;
    (3) More than five percent (5%) but less than thirty-three and one-
third percent (33\1/3\%), the Agency shall determine whether the 
applicant participants have sufficient control and responsibility to 
alter the development of the proposal such that the Agency's action 
will be considered a Federal action subject to this part. Consideration 
shall be given to such factors as:
    (i) Whether construction would be completed regardless of the 
Agency's financial assistance or approval;
    (ii) The stage of planning and construction;
    (iii) Total participation of the applicant;
    (iv) Participation percentage of each participant; and
    (v) Managerial arrangements and contractual provisions.


Sec.  1970.9  Levels of environmental review.

    (a) The Agency has identified classes of actions and the level of 
environmental review required for applicant proposals and Agency 
actions

[[Page 6783]]

in subparts B (CEs), C (EAs), and D (EISs) of this part. An applicant 
seeking financial assistance from the Agency must sufficiently describe 
its proposal so that the Agency can properly classify the proposal 
(i.e., determine the level of environmental review necessary).
    (b) If an action is not identified in the classes of actions listed 
in subparts B, C, or D of this part, the Agency will determine what 
level of environmental review is appropriate.
    (c) A single environmental document will evaluate an applicant's 
proposal and any other activities that are closely related, connected, 
interdependent, or likely to have significant cumulative effects. When 
a proposal represents one segment of a larger interdependent proposal 
being funded jointly by various entities, the level of environmental 
review will normally include the entire proposal.
    (d) Upon submission of multi-year Telecommunication Program Loan/
System Designs or multi-year Electric Program Construction Work Plans, 
the Agency will identify the appropriate classification for all 
proposals listed in the applicable design or work plan and may request 
any additional environmental information at or prior to the time of 
approval.


Sec.  1970.10  Raising the level of environmental review.

    Environmental conditions, scientific controversy, or other 
characteristics unique to a specific proposal can trigger the need for 
a higher level of environmental review than described in subparts B or 
C of this part. When necessary, the Agency will determine whether 
extraordinary circumstances (see Sec.  1970.52) or the potential for 
significant environmental impacts warrant a higher level of review. The 
Agency is solely responsible for determining the level of environmental 
review to be conducted and the adequacy of environmental review that 
has been performed.


Sec.  1970.11  Timing of the environmental review process.

    (a) Once an applicant decides to request Agency financial 
assistance, the environmental review process must be initiated at the 
earliest possible time to ensure that planning, design, and other 
decisions reflect environmental policies and values, avoid delays, and 
minimize potential conflicts. This includes early coordination with the 
Agency, all funding partners, and regulatory agencies, in order to 
minimize duplication of effort.
    (b) The environmental review process must be concluded before 
completion of the obligation of funds.
    (c) The environmental review process is formally concluded when all 
of the following have occurred:
    (1) The Agency has reviewed the appropriate environmental review 
document for completeness;
    (2) All required public notices have been published and public 
comment periods have elapsed;
    (3) All comments received during any established comment period 
have been considered and addressed appropriately by the Agency;
    (4) The environmental review document has been approved by the 
Agency; and
    (5) The appropriate environmental decision document has been 
executed by the Agency after Sec.  1970.11(c)(1) through (4) have been 
concluded.
    (d) For proposed actions listed in Sec.  1970.151 and to ensure 
Agency compliance with the conflict of interest provisions in 40 CFR 
1506.5(c), the Agency is responsible for selecting any third-party EIS 
contractor and participating in the EIS preparation. For more 
information regarding acquisition of professional services and funding 
of a third-party contractor, refer to Sec.  1970.152.


Sec.  1970.12  Limitations on actions during the NEPA process.

    (a) Limitations on actions. Applicants must not take actions 
concerning a proposal that may potentially have an environmental impact 
or would otherwise limit or affect the Agency's decision until the 
Agency's environmental review process is concluded. If such actions are 
taken, the Agency may deny the request for financial assistance.
    (b) Anticipatory demolition. If the Agency determines that an 
applicant has intentionally significantly adversely affected a historic 
property with the intent to avoid the requirements of Section 106 of 
the NHPA (such as demolition or removal of all or part of the property) 
the Agency may deny the request for financial assistance in accordance 
with Section 110(k) of the NHPA.
    (c) Recent construction. When construction is in progress or has 
recently been completed by applicants who can demonstrate no prior 
intent to seek Agency assistance at the time of application submittal 
to the Agency, the following requirements apply:
    (1) In cases where construction commenced within 6 months prior to 
the date of application, the Agency will determine and document whether 
the applicant initiated construction to avoid environmental compliance 
requirements. If any evidence to that effect exists, the Agency may 
deny the request for financial assistance.
    (2) If there is no evidence that an applicant is attempting to 
avoid environmental compliance requirements, the application is subject 
to the following additional requirements:
    (i) The Agency will promptly provide written notice to the 
applicant that the applicant must halt construction if it is ongoing 
and fulfill all environmental compliance responsibilities before the 
requested financing will be provided;
    (ii) The applicant must take immediate steps to identify any 
environmental resources affected by the construction and protect the 
affected resources; and
    (iii) With assistance from the applicant and to the extent 
practicable, the Agency will determine whether environmental resources 
have been adversely affected by any construction and this information 
will be included in the environmental document.
    (d) Minimal expenditures. In accordance with 40 CFR 1506.1(d), 
nothing shall preclude the Agency from approving minimal expenditures 
by the applicant not affecting the environment (e.g., long lead-time 
equipment, purchase options, or environmental or technical 
documentation needed for Agency environmental review). 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 Agency, and must 
not compromise the objectivity of the Agency's environmental review 
process.


Sec.  1970.13  Consideration of alternatives.

    The purpose of considering alternatives to a proposed action is to 
explore and evaluate whether there may be reasonable alternatives to 
that action that may have fewer or less significant negative 
environmental impacts. When considering whether the alternatives are 
reasonable, the Agency will take into account factors such as economic 
and technical feasibility. The extent of the analysis on each 
alternative will depend on the nature and complexity of the proposal. 
Environmental review documents must discuss the consideration of 
alternatives as follows:
    (a) For proposals subject to subpart C of this part, the 
environmental effects of the ``No Action'' alternative must be 
evaluated. All EAs must evaluate other reasonable alternatives whenever 
the

[[Page 6784]]

proposal involves potential adverse effects to environmental resources.
    (b) For proposals subject to subpart D of this part, the Agency 
will follow the requirements in 40 CFR part 1502.


Sec.  1970.14  Public involvement.

    (a) Goal. The goal of public involvement is to engage affected or 
interested parties and share information and solicit input regarding 
environmental impacts of proposals. This helps the Agency to better 
identify potential environmental impacts and mitigation measures and 
allows the public to review and comment on proposals under 
consideration by the Agency. The nature and extent of public 
involvement will depend upon the public interest and the complexity, 
sensitivity, and potential for significant environmental impacts of the 
proposal.
    (b) Responsibility to involve the public. The Agency will require 
applicant assistance throughout the environmental review process, as 
appropriate, to involve the public as required under 40 CFR 1506.6. 
These activities may include, but are not limited to:
    (1) Coordination with Federal, state, and local agencies; Federally 
recognized American Indian tribes; Alaska Native organizations; Native 
Hawaiian organizations; and the public;
    (2) Providing meaningful opportunities for involvement of affected 
minority or low-income populations, which may include special outreach 
efforts, so that potential disproportionate effects on minority or low-
income populations are reduced to the maximum extent practicable;
    (3) Publication of notices;
    (4) Organizing and conducting meetings; and
    (5) Providing translators, posting information on electronic media, 
or any other additional means needed that will successfully inform the 
public.
    (c) Scoping. In accordance with 40 CFR 1501.7, scoping is an early 
and open process to identify significant environmental issues deserving 
of study, de-emphasize insignificant issues, and determine the scope of 
the environmental review process.
    (1) Public scoping meetings allow the public to obtain information 
about a proposal and to express their concerns directly to the parties 
involved and help determine what issues are to be addressed and what 
kinds of expertise, analysis, and consultation are needed. For 
proposals classified in Sec. Sec.  1970.101 and 1970.151, scoping 
meetings may be required at the Agency's discretion. The Agency may 
require a scoping meeting whenever the proposal has substantial 
controversy, scale, or complexity.
    (2) If required, scoping meetings will be held at reasonable times, 
in accessible locations, and in the geographical area of the proposal 
at a location the Agency determines would best afford an opportunity 
for public involvement.
    (3) When held, applicants must attend and participate in all 
scoping meetings. When requested by the Agency, the applicant must 
organize and arrange meeting locations, publish public notices, provide 
translation, provide for any equipment needs such as those needed to 
allow for remote participation, present information on their proposal, 
and fulfill any related activities.
    (d) Public notices. (1) The Agency is responsible for meeting the 
public notice requirements in 40 CFR 1506.6, but will require the 
applicant to provide public notices of the availability of 
environmental documents and of public meetings so as to inform those 
persons and agencies who may be interested in or affected by an 
applicant's proposal. The Agency will provide applicants with guidance 
as to specific notice content, publication frequencies, and 
distribution requirements. Public notices issued by the Agency or the 
applicant must describe the nature, location, and extent of the 
applicant's proposal and the Agency's proposed action; notices must 
also indicate the availability and location of pertinent information.
    (2) Notices generally must be published in a newspaper(s) of 
general circulation within the proposal's affected areas and other 
places as the Agency determines. The notice must be published in the 
non-classified section or a designated public notice section of the 
newspaper. If the affected area is largely non-English speaking or 
bilingual, the notice must be published in both English and non-English 
language newspapers serving the affected area, if both are available. 
The Agency will determine the use of other distribution methods for 
communicating information to affected individuals and communities if 
those are more likely to be effective.
    (3) The number of times notices regarding EAs must be published is 
specified in Sec.  1970.102(b)(6)(ii). Other distribution methods may 
be used in special circumstances when a newspaper notice is not 
available or is not adequate. Additional distribution methods may 
include, but are not limited to, direct public notices to adjacent 
property owners or occupants, mass mailings, radio broadcasts, internet 
postings, posters, or some other combination of public announcements.
    (4) Formal notices required for EIS-level proposals pursuant to 40 
CFR part 1500 will be published by the Agency in the Federal Register.
    (e) Public availability. Documents associated with the 
environmental review process will be made available to the public at 
convenient locations specified in public notices and, where 
appropriate, on the Agency's Web site. Environmental documents which 
are voluminous or contain hard-to-reproduce graphics or maps should be 
made available for viewing at one or more locations, such as an Agency 
field office, public library, or the applicant's place of business. 
Upon request, the Agency will promptly provide interested parties 
copies of environmental review documents without charge to the extent 
practicable, or at a fee that is not more than the cost of reproducing 
and shipping the copies.
    (f) Public comments. All comments should be directed to the Agency. 
Comments received by applicants must be forwarded to the Agency in a 
timely manner. The Agency will assess and consider all comments 
received.


Sec.  1970.15  Interagency cooperation.

    In order to reduce delay and paperwork, the Agency will, when 
practicable, eliminate duplication of Federal, state, and local 
procedures by participating in joint environmental document 
preparation, adopting appropriate environmental documents prepared for 
or by other Federal agencies, and incorporating by reference other 
environmental documents in accordance with 40 CFR 1506.2 and 1506.3.
    (a) Coordination with other Federal agencies. When other Federal 
agencies are involved in an Agency action listed in Sec.  1970.101 or 
Sec.  1970.151, the Agency will coordinate with these agencies to 
determine cooperating agency relationships as appropriate in the 
preparation of a joint environmental review document. The criteria for 
making this determination can be found at 40 CFR 1501.5.
    (b) Adoption of documents prepared for or by other Federal 
agencies. The Agency may adopt EAs or EISs prepared for or by other 
Federal agencies if the proposed actions and site conditions addressed 
in the environmental document are substantially the same as those 
associated with the proposal being considered by the Agency. The Agency 
will consider age, location, and other reasonable factors in 
determining the usefulness of the other Federal documents. The Agency 
will complete

[[Page 6785]]

an independent evaluation of the environmental document to ensure it 
meets the requirements of this part. If any environmental document does 
not meet all Agency requirements, it will be supplemented prior to 
adoption. Where there is a conflict in the two agencies' classes of 
action, the Agency may adopt the document provided that it meets the 
Agency's requirements.
    (c) Cooperation with state and local governments. In accordance 
with 40 CFR 1500.5 and 1506.2, the Agency shall cooperate with state 
and local agencies to the fullest extent possible to reduce delay and 
duplication between NEPA and comparable state and local requirements.
    (1) Joint environmental documents. To the extent practicable, the 
Agency will participate in the preparation of a joint document to 
ensure that all of the requirements of this part are met. Applicants 
that request Agency assistance for specific proposals must contact the 
Agency at the earliest possible date to determine if joint 
environmental documents can be effectively prepared. In order to 
prepare joint documents the following conditions must be met:
    (i) Applicants must also be seeking financial, technical, or other 
assistance such as permitting or approvals from a State or local agency 
that has responsibility to complete an environmental review for the 
applicant's proposal; and
    (ii) The Agency and the State or local agency may agree to be joint 
lead agencies where practicable. When State laws or local ordinances 
have environmental requirements in addition to, but not in conflict 
with those of the Agency, the Agency will cooperate in fulfilling these 
requirements.
    (2) Incorporating other documents. The Agency cannot adopt a non-
Federal environmental document under NEPA. However, if an environmental 
document is not jointly prepared as described in paragraph (c)(1) of 
this section (e.g., prepared in accordance with a State environmental 
policy act [SEPA]), the Agency will evaluate the document as reference 
or supporting material for the Agency's environmental document.


Sec.  1970.16  Mitigation.

    (a) The goal of mitigation is to avoid, minimize, rectify, reduce, 
or compensate for the adverse environmental impacts of an action. The 
Agency will seek to mitigate potential adverse environmental impacts 
resulting from Agency actions. All mitigation measures will be included 
in Agency commitment or decision documents.
    (b) Mitigation measures, where necessary for a FONSI or, where 
applicable, ROD, will be discussed with the applicant and with any 
other relevant agency and, to the extent practicable, incorporated into 
Agency commitment documents, plans and specifications, and construction 
contracts so as to be legally binding.
    (c) The Agency, applicable lenders, or any intermediaries will 
monitor implementation of all mitigation measures during development of 
design, final plans, inspections during the construction phase of 
projects, as well as in future servicing visits. The Agency will direct 
applicants to take necessary measures to bring the project into 
compliance. If the applicant fails to achieve compliance, all 
advancement of funds and the approval of cost reimbursements will be 
suspended. Other measures may be taken by the Agency to redress the 
failed mitigation as appropriate.


Sec.  1970.17  Programmatic analyses and tiering.

    In accordance with 40 CFR 1502.20 and to foster better decision 
making, the Agency may consider preparing programmatic-level NEPA 
analyses and tiering to eliminate repetitive discussions of the same 
issues and to focus on the actual issues ripe for decision at each 
level of environmental review.


Sec.  1970.18  Emergencies.

    When an emergency exists and the Agency determines that it is 
necessary to take emergency action before preparing a NEPA analysis and 
any required documentation, the following provisions apply:
    (a) Urgent response. The Agency and the applicant, as appropriate, 
may take actions necessary to control the immediate impacts of an 
emergency. Emergency actions include those that are urgently needed to 
return damaged facilities to service and to mitigate harm to life, 
property, or important natural or cultural resources. When taking such 
actions, the Agency and the applicant, when applicable, will take into 
account the probable environmental consequences of the emergency action 
and mitigate foreseeable adverse environmental effects to the extent 
practicable.
    (b) CE- and EA-level actions. If the Agency proposes longer-term 
emergency actions other than those actions described in paragraph (a) 
of this section, and such actions are not likely to have significant 
environmental impacts, the Agency will document that determination in a 
finding for a CE or in a FONSI for an EA prepared in accordance with 
these regulations. If the Agency finds that the nature and scope of 
proposed emergency actions are such that they must be undertaken prior 
to preparing any NEPA analysis and documentation associated with a CE 
or EA, the Agency will identify alternative arrangements for compliance 
with this part with the appropriate agencies.
    (1) Alternative arrangements for environmental compliance are 
limited to actions necessary to control the immediate impacts of the 
emergency.
    (2) Alternative arrangements will, to the extent practicable, 
attempt to achieve the substantive requirements of this part.
    (c) EIS-level actions. If the Agency proposes emergency actions 
other than those actions described in paragraphs (a) or (b) of this 
section and such actions are likely to have significant environmental 
impacts, then the Agency will consult with the CEQ about alternative 
arrangements in accordance with CEQ regulations at 40 CFR 1506.11 as 
soon as possible.


Sec. Sec.  1970.19-1970.50   [Reserved]

Subpart B--NEPA Categorical Exclusions


Sec.  1970.51  Applying CEs.

    (a) The actions listed in Sec. Sec.  1970.53 through 1970.55 are 
classes of actions that the Agency has determined do not individually 
or cumulatively have a significant effect on the human environment 
(referred to as ``categorical exclusions'' or CEs).
    (1) Actions listed in Sec.  1970.53 do not normally require 
applicants to submit environmental documentation with their 
applications. However, these applicants may be required to provide 
environmental information later at the Agency's request.
    (2) Actions listed in Sec.  1970.54 normally require the submission 
of environmental documentation by applicants to allow the Agency to 
determine whether extraordinary circumstances (as defined in Sec.  
1970.52(a)) exist. When the Agency determines that extraordinary 
circumstances exist, an EA or EIS, as appropriate, will be required 
and, in such instances, applicants may be required to provide 
additional environmental information later at the Agency's request.
    (3) Actions listed in Sec.  1970.55 relate to financial assistance 
whereby the applicant is a primary recipient of a multi-tier program 
providing financial assistance to secondary or ultimate recipients 
without specifying the use of

[[Page 6786]]

such funds for eligible actions at the time of initial application and 
approval. The decision to approve or fund such initial proposals has no 
discernible environmental effects and is therefore categorically 
excluded provided the primary recipient enters into certain agreements 
with the Agency for future reviews. The primary recipient is limited to 
making the Agency's financial assistance available to secondary 
recipients for the types of projects specified in the primary 
recipient's application. Second-tier funding of proposals to secondary 
or ultimate recipients will be screened for extraordinary circumstances 
by the primary recipient and monitored by the Agency. If the primary 
recipient determines that extraordinary circumstances exist on any 
second-tier proposal, it must be referred to the Agency for the 
appropriate level of review under this part in accordance with subparts 
C and D of this part.
    (b) To find that a proposal is categorically excluded, the Agency 
must determine the following:
    (1) The proposal fits within a class of actions that is listed in 
Sec. Sec.  1970.53 through 1970.55;
    (2) There are no extraordinary circumstances related to the 
proposal (see Sec.  1970.52); and
    (3) The proposal is not ``connected'' (see 40 CFR 1508.25(a)(1)) to 
other actions with potentially significant impacts, is not related to 
other proposed actions with cumulatively significant impacts (see 40 
CFR 1508.25(a)(2)), and is not precluded by 40 CFR 1506.1.
    (d) A proposal that consists of more than one categorically 
excluded action may be categorically excluded only if all components of 
the proposed action are eligible for a CE.
    (e) If, at any time during the environmental review process, the 
Agency determines that the proposal does not meet the criteria listed 
in Sec. Sec.  1970.53 through 1970.55, an EA or EIS, as appropriate, 
will be required.
    (f) Failure to achieve compliance with this part will postpone 
further consideration of an applicant's proposal until such compliance 
is achieved or the applicant withdraws the proposal. If compliance is 
not achieved, the Agency will deny the request for financial 
assistance.


Sec.  1970.52  Extraordinary circumstances.

    (a) Extraordinary circumstances are unique situations presented by 
specific proposals, such as characteristics of the geographic area 
affected by the proposal, scientific controversy about the 
environmental effects of the proposal, uncertain effects or effects 
involving unique or unknown risks, and unresolved conflicts concerning 
alternate uses of available resources within the meaning of Section 
102(2)(E) of NEPA.
    (b) Pursuant to Sec. Sec.  1970.53 and 1970.54, the Agency will 
consider a proposal's potential to cause any significant adverse 
environmental effects to be an extraordinary circumstance. Significant 
adverse environmental effects that the Agency considers to be 
extraordinary circumstances include, but are not limited to:
    (1) Any violation of applicable Federal, state, or local statutory, 
regulatory, permit, or Executive order requirements for environment, 
safety, and health.
    (2) Siting, construction, or major expansion of Resource 
Conservation and Recovery Act permitted waste storage, disposal, 
recovery, or treatment facilities (including incinerators), even if the 
proposal includes categorically excluded waste storage, disposal, 
recovery, or treatment actions.
    (3) Any proposal that is likely to cause uncontrolled or 
unpermitted releases of hazardous substances, pollutants, contaminants, 
or petroleum and natural gas products.
    (4) An adverse effect on the following environmental resources:
    (i) Historic properties;
    (ii) Federally listed threatened or endangered species, critical 
habitat, Federally proposed or candidate species;
    (iii) Wetlands (those actions that require an individual permit 
under the Clean Water Act, Section 404 regulations);
    (iv) Floodplains (those actions that introduce fill or structures 
into a floodplain where Executive Order 11988 requires consideration of 
alternatives to avoid adverse effects and incompatible development in 
floodplains. Actions that do not adversely affect the hydrologic 
character of a floodplain, such as buried utility lines or subsurface 
pump stations, are not considered extraordinary circumstances);
    (v) Areas having formal Federal or state designations such as 
wilderness areas, parks, or wildlife refuges; wild and scenic rivers; 
or marine sanctuaries;
    (vi) Special sources of water (such as sole source aquifers, 
wellhead protection areas, and other water sources that are vital in a 
region);
    (vii) Coastal barrier resources or, unless exempt, coastal zone 
management areas; and
    (viii) Coral reefs.
    (5) The existence of controversy based on effects to the human 
environment brought to the Agency's attention by a Federal, tribal, 
state, or local government agency.
    (c) In the presence of extraordinary circumstances, a normally 
excluded action will be the subject of an EA or an EIS, as appropriate, 
prepared in accordance with subparts C or D of this part, respectively.


Sec.  1970.53  CEs involving no or minimal disturbance.

    The CEs in this section are for proposals for financial assistance 
that involve no or minimal alterations in the physical environment and 
typically occur on previously disturbed land. These actions normally do 
not require an applicant to submit environmental documentation with the 
application. However, the Agency may request additional environmental 
documentation from the applicant at any time, specifically if the 
Agency determines that extraordinary circumstances may exist. The CEs 
in this section also include CEs for certain Agency actions.
    (a) Routine financial actions. These CEs apply to the following 
routine financial actions:
    (1) Refinancing of debt, provided that the applicant is not using 
refinancing as a means of avoiding compliance with environmental 
requirements.
    (2) Financial assistance for the purchase, transfer, lease, or 
other acquisition of real property when no or minimal change in use is 
reasonably foreseeable. Rural Housing Site Loans are not eligible for 
this CE.
    (i) Real property includes land and any existing permanent or 
affixed structures.
    (ii) ``No or minimal change in use is reasonably foreseeable'' 
means no or only a small change in use, capacity, purpose, operation, 
or design is expected where the foreseeable type and magnitude of 
impacts would remain essentially the same.
    (3) Financial assistance for the purchase, transfer, or lease of 
personal property or fixtures where no or minimal change in operations 
is reasonably foreseeable. These include:
    (i) Approval of minimal expenditures not affecting the environment 
such as contracts for long lead-time equipment and purchase options by 
applicants under the terms of 40 CFR 1506.1(d) and 7 CFR 1970.12;
    (ii) Acquisition of end-user equipment and programming for 
telecommunication distance learning;
    (iii) Purchase, replacement, or installation of equipment necessary 
for the operation of an existing facility (such as Supervisory Control 
and Data

[[Page 6787]]

Acquisition Systems (SCADA), energy management or efficiency 
improvement systems, standby internal combustion electric generators, 
battery energy storage systems, and associated facilities for the 
primary purpose of providing emergency power);
    (iv) Purchase of vehicles (such as those used in business, utility, 
community, or emergency services operations);
    (v) Purchase of existing water rights where no associated 
construction is involved;
    (vi) Purchase of livestock and essential farm equipment, including 
crop storing and drying equipment;
    (vii) Purchase of stock in an existing enterprise to obtain an 
ownership interest in that enterprise.
    (4) Financial assistance for operating (working) capital for an 
existing operation to support day-to-day expenses;
    (5) Loan-servicing actions by the Agency after provision of 
financial assistance when such actions have no potential for 
significant adverse environmental impact because the actions would 
involve no or minimal construction or change in operations in the 
foreseeable future. These actions include, but are not limited to: 
Foreclosure, sale or lease of Agency-owned real property obtained 
through foreclosure, Agency consents or approvals under existing 
agreements, and other such servicing actions, if such actions will have 
no or minimal construction or change in current operations in the 
foreseeable future. If such actions involve more than minimal 
construction or change in operations in the foreseeable future, the 
Agency will classify the action according to this part and the 
appropriate level of environmental review will be conducted prior to 
the approval of such action. If such actions are not ripe for immediate 
review, the Agency will require that the applicant or the party seeking 
Agency consent, as applicable, complete a separate environmental review 
as soon as the plans are sufficiently ripe to determine if such 
construction or change in operations will be classified as a CE, EA, or 
EIS under this part;
    (6) Rural Business Investment Program actions as follows:
    (i) Non-leveraged program actions that include licensing by USDA of 
Rural Business Investment Companies (RBIC); or
    (ii) Leveraged program actions that include licensing by USDA of 
RBIC and Federal financial assistance in the form of technical grants 
or guarantees of debentures of an RBIC, unless such Federal assistance 
is used to finance construction or development of land; and
    (7) Guarantees issued to the Federal Financing Bank by the Agency 
under Section 313A(a) of the Rural Electrification Act of 1936 for 
guaranteed underwriting loans.
    (b) Information gathering and technical assistance. These CEs apply 
to financial assistance for:
    (1) Information gathering, data analysis, document preparation, 
real estate appraisals, environmental site assessments, and information 
dissemination. Examples of these actions are:
    (i) Information gathering such as research, literature surveys, 
inventories, and audits.
    (ii) Data analysis such as computer modeling.
    (iii) Document preparation such as strategic plans; conceptual 
designs; management, economic, planning, or feasibility studies; energy 
audits or assessments; environmental analyses; and survey and analyses 
of accounts and business practices.
    (iv) Information dissemination such as document mailings, 
publication, and distribution; and classroom training and informational 
programs.
    (2) Technical advice, training, planning assistance, and capacity 
building. Examples of these actions are:
    (i) Technical advice, training, planning assistance such as 
guidance for cooperatives and self-help housing group planning.
    (ii) Capacity building such as leadership training, strategic 
planning, and community development training.
    (3) Site characterization, environmental testing, and monitoring 
where no significant alteration of existing ambient conditions would 
occur. This includes, but is not limited to, air, surface water, 
groundwater, wind, soil, or rock core sampling; installation of 
monitoring wells; installation of small-scale air, water, or weather 
monitoring equipment.
    (c) Minor construction proposals. These CEs apply to financial 
assistance for:
    (1) Minor amendments or revisions to previously approved projects 
provided such activities do not alter the purpose, operation, location, 
or design of the project as originally approved;
    (2) Repair, upgrade, or replacement of equipment or fixtures in 
existing structures for such purposes as improving habitability, 
reconstruction, energy efficiency, or pollution prevention;
    (3) Any internal modification or minimal external modification, 
restoration, renovation, maintenance, and replacement in-kind to an 
existing facility or structure;
    (4) Construction of or improvements to a single-family dwelling or 
a multi-family housing project serving up to four families, except when 
financing is provided through a Rural Housing Site loan;
    (5) Siting, construction, and operation of new or additional water 
supply wells for residential, farm, or livestock use;
    (6) Modifications of an existing water supply well to restore 
production in existing commercial well fields, if there would be no 
drawdown other than in the immediate vicinity of the pumping well, no 
resulting long-term decline of the water table, and no degradation of 
the aquifer from the replacement well;
    (7) New utility service connections to individual users or 
construction of utility lines or associated components where the 
applicant has no control over the placement of the utility facilities;
    (8) Conversion of land in agricultural production to pastureland or 
forests, or conversion of pastureland to forest;
    (9) Land-clearing operations of no more than 15 acres, provided any 
amount of land involved in tree harvesting is to be conducted on a 
sustainable basis and according to a Federal, state, or other 
governmental unit approved forestry management plan; and
    (10) Conversion of no more than 160 acres of pastureland to 
agricultural production.
    (d) Energy or telecommunication proposals. These CEs apply to 
financial assistance for:
    (1) Changes to existing telecommunication facilities or electric 
transmission lines that involve pole replacement or structural 
components only where either the same or substantially equivalent 
support structures at the approximate existing support structure 
locations are used;
    (2) Phase or voltage conversions, reconductoring, upgrading, or 
rebuilding of existing electric distribution lines or telecommunication 
facilities;
    (3) Addition of telecommunication cables and related facilities to 
electric transmission and distribution structures;
    (4) Siting, construction, and operation of small, ground source 
heat pump systems that would be located on previously disturbed land;
    (5) Siting, construction, and operation of small solar electric 
projects or solar thermal projects to be installed on an existing 
structure with no expansion of the footprint of the existing structure;
    (6) Siting, construction, and operation of small biomass projects, 
such as

[[Page 6788]]

animal waste anaerobic digesters or gasifiers, that would use feedstock 
produced on site (such as a farm where the site has been previously 
disturbed) and supply gas or electricity for the site's own energy 
needs with no or only incidental export of energy;
    (7) Construction of small standby electric generating facilities of 
one average megawatt (MW) or less total capacity and associated 
facilities, for the purpose of providing emergency power for or startup 
of an existing facility;
    (8) Additions or modifications to electric power transmission 
facilities that would not affect the environment beyond the previously 
developed facility area including, but not limited to, switchyard rock 
grounding upgrades, secondary containment projects, paving projects, 
seismic upgrading, tower modifications, changing insulators, and 
replacement of poles, circuit breakers, conductors, transformers, and 
crossarms; and
    (9) Safety, environmental, or energy efficiency improvements within 
an existing electric generation facility, including addition, 
replacement, or upgrade of facility components (such as precipitator, 
baghouse, or scrubber installations), that do not result in a change to 
the design capacity or function of the facility and do not result in an 
increase in pollutant emissions, effluent discharges, or waste 
products.
    (e) Promulgation of rules or formal notices. The promulgation of 
rules or formal notices for policies or programs which are 
administrative or financial procedures for implementing Agency 
assistance activities.
    (f) Agency proposals for legislation. Agency proposals for 
legislation that have no potential for significant environmental 
impacts because they would allow for no or minimal construction or 
change in operations.
    (g) Administrative actions. Agency procurement activities for goods 
and services; routine facility operations; personnel actions, including 
but not limited to, reduction in force or employee transfers resulting 
from workload adjustments, and reduced personnel or funding levels; and 
other such management actions related to the operation of the Agency.


Sec.  1970.54  CEs involving small-scale development.

    The CEs in this section are for proposals for financial assistance 
that require an applicant to submit environmental documentation with 
their application to facilitate Agency determination of extraordinary 
circumstances. At a minimum, this documentation will include a complete 
description of all components of the applicant's proposal and any 
connected actions, including its specific location on detailed site 
plans as well as location maps equivalent to a U.S. Geological Survey 
(USGS) quad map; and information from authoritative sources acceptable 
to the Agency confirming the presence or absence of sensitive 
environmental resources in the area that could be affected by the 
applicant's proposal. The environmental documentation submitted must be 
accurate, complete, and capable of verification. The Agency may request 
additional information as needed to make an environmental 
determination. Failure to submit the required documentation will 
postpone further consideration of the applicant's proposal until the 
environmental documentation is submitted, or the Agency may deny the 
request for financial assistance. The Agency will review all additional 
documentation and determine if extraordinary circumstances exist. The 
Agency will also review such documentation and may determine that 
classification as an EA or an EIS is more appropriate than a CE 
classification.
    (a) Small-scale site-specific development. These CEs apply to 
proposals where site development activities (including construction, 
expansion, repair, rehabilitation, or other improvements) for rural 
development purposes would impact not more than 10 acres of real 
property and would not cause a substantial increase in traffic. 
Examples of such purposes and activities are identified in paragraphs 
(a)(1) through (a)(9) of this section. This paragraph does not apply to 
new industrial proposals or new energy generation over 100 kilowatts 
(kW) (such as ethanol and biodiesel production facilities) or those 
classes of action listed in Sec. Sec.  1970.53, 1970.101, or 1970.151.
    (1) Multi-family housing.
    (2) Business development.
    (3) Community facilities such as municipal buildings, libraries, 
security services, fire protection, schools, and health and recreation 
facilities.
    (4) Infrastructure to support utility systems such as water or 
wastewater facilities; headquarters, maintenance, equipment storage, or 
microwave facilities; and energy management systems. This does not 
include proposals that either create a new or relocate an existing 
discharge to or a withdrawal from surface or ground waters, or cause 
substantial increase in a withdrawal or discharge at an existing site.
    (5) Installation of new, commercial-scale water supply wells and 
associated pipelines 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.
    (6) Construction of telecommunications towers and associated 
facilities, if the towers and associated facilities are 450 feet or 
less in height and would not be in or visible from an area of 
documented scenic value.
    (7) Repair, rehabilitation, or restoration of water control, flood 
control, or water impoundment facilities, such as dams, dikes, levees, 
detention reservoirs, and drainage ditches, with minimal change in use, 
size, capacity, purpose, operation, location, or design from the 
original facility.
    (8) Installation or enlargement of irrigation facilities on an 
applicant's land, including storage reservoirs, diversion dams, wells, 
pumping plants, canals, pipelines, and sprinklers designed to irrigate 
less than 80 acres.
    (9) Replacement or restoration of irrigation facilities, including 
storage reservoirs, diversion dams, wells, pumping plants, canals, 
pipelines, and sprinklers, with no or minimal change in use, size, 
capacity, or location from the original facility(s).
    (b) Small-scale corridor development. These CEs apply to financial 
assistance for:
    (1) Construction or repair of roads, streets, and sidewalks, 
including related structures such as curbs, gutters, storm drains, and 
bridges, in an existing right-of-way with minimal change in use, size, 
capacity, purpose, or location from the original infrastructure;
    (2) Improvement and expansion of existing water, waste water, and 
gas utility systems:
    (i) Within one mile of currently served areas irrespective of the 
percent of increase in new capacity, or
    (ii) Increasing capacity not more than 30 percent of the existing 
user population;
    (3) Replacement of utility lines where road reconstruction 
undertaken by non-Agency applicants requires the relocation of lines 
either within or immediately adjacent to the new road easement or 
right-of-way;
    (4) Construction of new distribution lines and associated 
facilities less than 69 kilovolts (kV); and
    (5) Installation of telecommunications lines, cables, and related 
facilities.
    (c) Small-scale energy proposals. These CEs apply to financial 
assistance for:

[[Page 6789]]

    (1) Construction of electric power substations (including switching 
stations and support facilities) or modification of existing 
substations, switchyards, and support facilities;
    (2) Construction of electric transmission lines 10 miles in length 
or less, but not for the integration of major new generation resources 
into a bulk transmission system;
    (3) Reconstruction (upgrading or rebuilding) and/or minor 
relocation of existing electric transmission lines 20 miles in length 
or less to enhance environmental and land use values or to improve 
reliability or access. Such actions include relocations to avoid right-
of-way encroachments, resolve conflict with property development, 
accommodate road/highway construction, allow for the construction of 
facilities such as canals and pipelines, or reduce existing impacts to 
environmentally sensitive areas;
    (4) Repowering or uprating modifications or expansion of an 
existing unit(s) up to 50 average MW at electric generating facilities 
in order to maintain or improve the efficiency, capacity, or energy 
output of the facility. Any air emissions from such activities must be 
within the limits of an existing air permit;
    (5) Installation of new generating units or replacement of existing 
generating units at an existing hydroelectric facility or dam which 
results in no change in the normal maximum surface area or normal 
maximum surface elevation of the existing impoundment. All supporting 
facilities and new related electric transmission lines 10 miles in 
length or less are included;
    (6) Installation of a heat recovery steam generator and steam 
turbine with a rating of 200 average MW or less on an existing electric 
generation site for the purpose of combined cycle operations. All 
supporting facilities and new related electric transmission lines 10 
miles in length or less are included;
    (7) Construction of small electric generating facilities (except 
geothermal and solar electric projects), including those fueled with 
wind or biomass, capable of producing not more than 10 average MW. All 
supporting facilities and new related electric transmission lines 10 
miles in length or less are included;
    (8) Geothermal electric projects developed on up to 10 acres of 
land and including installation of one geothermal well for the 
production of geothermal fluids for direct use application (such as 
space or water heating/cooling) or for power generation. All supporting 
facilities and new related electric transmission lines 10 miles in 
length or less are included;
    (9) Solar electric projects developed on up to 10 acres of land 
including all supporting facilities and new related electric 
transmission lines 10 miles in length or less;
    (10) Distributed resources of any capacity located at or adjacent 
to an existing landfill site or wastewater treatment facility that is 
powered by refuse-derived fuel. All supporting facilities and new 
related electric transmission lines 10 miles in length or less are 
included;
    (11) Small conduit hydroelectric facilities having a total 
installed capacity of not more than 5 average MW using an existing 
conduit such as an irrigation ditch or a pipe into which a turbine 
would be placed for the purpose of electric generation. All supporting 
facilities and new related electric transmission lines 10 miles in 
length or less are included; and
    (12) Modifications or enhancements to existing facilities or 
structures that would not substantially change the footprint or 
function of the facility or structure and that are undertaken for the 
purpose of improving energy efficiency, promoting pollution prevention, 
safety, reliability, or security. This includes, but is not limited to, 
retrofitting existing facilities to produce biofuels and replacing 
fossil fuels used to produce heat or power in biorefineries with 
renewable biomass. This also includes installation of fuel blender 
pumps and associated changes within an existing fuel facility.


Sec.  1970.55  CEs for multi-tier actions.

    The CEs in this section apply solely to providing financial 
assistance to primary multi-tier recipients in multi-tier action 
programs.
    (a) The Agency's approval of financial assistance to a primary 
recipient in a multi-tier action program is categorically excluded if 
the primary recipient agrees in writing to:
    (1) Conduct a screening of all proposed uses of funds to determine 
whether each proposal that would be funded or financed falls within 
Sec.  1970.53 or Sec.  1970.54 as a categorical exclusion;
    (2) Obtain sufficient information to make an evaluation of those 
proposals listed in Sec.  1970.53 or Sec.  1970.54 to determine if 
extraordinary circumstances (as described in Sec.  1970.52) are 
present;
    (3) Document and report its conclusions regarding the applicability 
of a CE in its official records for Agency verification; and
    (4) Refer any proposals that do not meet the criteria listed in 
Sec.  1970.53 or Sec.  1970.54, or proposals that may have 
extraordinary circumstances (as described in Sec.  1970.52) to the 
Agency.
    (b) Compliance with this section will be determined in Agency 
compliance reviews and other required audits for all primary multi-tier 
recipients. Failure by a primary recipient to meet the requirements of 
this section will result in penalties that may include written 
warnings, withdrawal of Agency assistance, withdrawal of Agency 
authorizations, or suspension from participation in Agency programs.
    (c) Nothing in this section is intended to delegate the Agency's 
responsibility for compliance with this part. The Agency will continue 
to maintain ultimate responsibility for and control over the NEPA 
process.


Sec. Sec.  1970.56-1970.100  [Reserved]

Subpart C--NEPA Environmental Assessments


Sec.  1970.101  General.

    (a) An EA is a concise public document used by the Agency to 
determine whether to issue a FONSI or prepare an EIS, as specified in 
subpart D of this part. If, at any point during the preparation of an 
EA, it is determined that the proposal will have a potentially 
significant impact on the quality of the human environment, an EIS will 
be prepared.
    (b) Unless otherwise determined by the Agency, EAs will be prepared 
for all ``major federal actions'' as described in 7 CFR 1970.8, unless 
such actions are categorically excluded, as determined under subpart B 
of this part, or require an EIS, as provided under subpart D of this 
part;
    (c) Preparation of an EA will begin as soon as the Agency has 
determined the proper classification of the applicant's proposal. 
Applicants should consult as early as possible with the Agency to 
determine the environmental review requirements of their proposals. The 
EA must be prepared concurrently with the early planning and design 
phase of the proposal. The EA will not be considered complete until it 
is in compliance with this part.
    (d) Failure to achieve compliance with this part will result in 
postponement of further consideration of the applicant's proposal until 
such compliance is achieved or the applicant withdraws the application. 
If compliance is not achieved, the Agency will deny the request for 
financial assistance.

[[Page 6790]]

Sec.  1970.102  Preparation of EAs.

    The EA must focus on resources that might be affected and any 
environmental issues that are of public concern.
    (a) The amount of information and level of analysis provided in the 
EA should be commensurate with the magnitude of the proposal's 
activities and its potential to affect the quality of the human 
environment, but must discuss the following:
    (1) The purpose and need for the proposed action;
    (2) The affected environment, including baseline conditions that 
may be impacted by the proposed action and alternatives;
    (3) The environmental impacts of the proposed action including the 
No Action alternative, and, if a specific project element is likely to 
adversely affect a resource, at least one alternative to the proposed 
action;
    (4) Any applicable environmental laws and Executive orders;
    (5) Any required coordination undertaken with any Federal, state, 
or local agencies or Indian tribes regarding compliance with applicable 
laws and Executive orders;
    (6) Mitigation measures considered, including those measures that 
must be adopted to ensure the action will not have significant impacts;
    (7) Any documents incorporated by reference, if appropriate, 
including, information provided by the applicant for the proposed 
action; and
    (8) A listing of persons and agencies consulted.
    (b) The following describes the normal processing of an EA under 
this subpart:
    (1) The Agency advises the applicant of its responsibilities as 
described in subpart A of this part. These responsibilities include 
preparation of the EA as discussed in Sec.  1970.5(b)(3)(iv)(C).
    (2) The applicant provides a detailed project description including 
connected actions.
    (3) The Agency verifies that the applicant's proposal should be the 
subject of an EA under Sec.  1970.101. In addition, the Agency 
identifies any unique environmental requirements associated with the 
applicant's proposal.
    (4) The Agency or the applicant, as appropriate, coordinates with 
Federal, State, and local agencies with jurisdiction by law or special 
expertise; tribes; and interested parties during EA preparation.
    (5) Upon receipt of the EA from the applicant, the Agency evaluates 
the completeness and accuracy of the documentation. If necessary, the 
Agency will require the applicant to correct any deficiencies and 
resubmit the EA prior to its review.
    (6) The Agency reviews the EA and supporting documentation to 
determine whether the environmental review is acceptable.
    (i) If the Agency finds the EA unacceptable, the Agency will notify 
the applicant, as necessary, and work to resolve any outstanding 
issues.
    (ii) If the Agency finds the EA acceptable, it will prepare or 
review a ``Notice of Availability of the EA'' and direct the applicant 
to publish the notice in local newspapers or through other distribution 
methods as approved by the Agency. The notice must be published for 
three consecutive issues in a daily newspaper, or 2 consecutive weeks 
in a weekly newspaper. If other distribution methods are approved, the 
Agency will identify equivalent requirements. The public review and 
comment period will begin on the day of the first publication date or 
equivalent if other distribution methods are used. A 14- to 30-day 
public review and comment period, as determined by the Agency, will be 
provided for all Agency EAs.
    (7) After reviewing and evaluating all public comments, the Agency 
determines whether to modify the EA, prepare a FONSI, or prepare an EIS 
that conforms with subpart D of this part.
    (8) If the Agency determines that a FONSI is appropriate, and after 
preparation of the FONSI, the Agency will prepare or review a public 
notice announcing the availability of the FONSI and direct the 
applicant to publish the public notice in a newspaper(s) of general 
circulation, as described in Sec.  1970.14(d)(2). In such case, the 
applicant must obtain an ``affidavit of publication'' or other such 
proof from all publications (or equivalent verification if other media 
were used) and must submit the affidavits and verifications to the 
Agency.


Sec.  1970.103  Supplementing EAs.

    If the applicant makes substantial changes to a proposal or if new 
relevant environmental information is brought to the attention of the 
Agency after the issuance of an EA or FONSI, supplementing an EA may be 
necessary. Depending on the nature of the changes, the EA will be 
supplemented by revising the applicable section(s) or by appending the 
information to address potential impacts not previously considered. If 
an EA is supplemented, public notification will be required in 
accordance with Sec.  1970.102(b)(7) and (8).


Sec.  1970.104  Finding of No Significant Impact.

    The Agency may issue a FONSI or a revised FONSI only if the EA or 
supplemental EA supports the finding that the proposed action will not 
have a significant effect on the human environment. If the EA does not 
support a FONSI, the Agency will follow the requirements of subpart D 
of this part before taking action on the proposal.
    (a) A FONSI must include:
    (1) A summary of the supporting EA consisting of a brief 
description of the proposed action, the alternatives considered, and 
the proposal's impacts;
    (2) A notation of any other EAs or EISs that are being or will be 
prepared and that are related to the EA;
    (3) A brief discussion of why there would be no significant 
impacts;
    (4) Any mitigation essential to finding that the impacts of the 
proposed action would not be significant;
    (5) The date issued; and
    (6) The signature of the appropriate Agency approval official.
    (b) The Agency must ensure that the applicant has committed to any 
mitigation that is necessary to support a FONSI and possesses the 
authority and ability to fulfill those commitments. The Agency must 
ensure that mitigation, and, if appropriate, a mitigation plan that is 
necessary to support a FONSI, is made a condition of financial 
assistance.
    (c) The Agency must make a FONSI available to the public as 
provided at 40 CFR 1501.4(e) and 1506.6.
    (d) The Agency may revise a FONSI at any time provided that the 
revision is supported by an EA or a supplemental EA. A revised FONSI is 
subject to all provisions of this section.


Sec. Sec.  1970.105-1970.150  [Reserved]

Subpart D--NEPA Environmental Impact Statements


Sec.  1970.151  General.

    (a) The purpose of an EIS is to provide a full and fair discussion 
of significant environmental impacts and to inform the appropriate 
Agency decision maker and the public of reasonable alternatives to the 
applicant's proposal, the Agency's proposed action, and any measures 
that would avoid or minimize adverse impacts.
    (b) Agency actions for which an EIS is required include, but are 
not limited to:
    (1) Proposals for which an EA was initially prepared and that may 
result in significant impacts that cannot be mitigated;

[[Page 6791]]

    (2) Siting, construction (or expansion), and decommissioning of 
major treatment, storage, and disposal facilities for hazardous wastes 
as designated in 40 CFR part 261;
    (3) Proposals that change or convert the land use of an area 
greater than 640 contiguous acres;
    (4) New electric generating facilities, other than gas-fired 
combustion turbines, of more than 50 average MW output, and all new 
associated electric transmission facilities;
    (5) New mining operations when the applicant has effective control 
(i.e., applicant's dedicated mine or purchase of a substantial portion 
of the mining equipment); and
    (6) Agency proposals for legislation that may have a significant 
environmental impact.
    (c) Failure to achieve compliance with this part will result in the 
postponement of further consideration of the applicant's proposal until 
the Agency determines that such compliance has been achieved or the 
applicant withdraws the application. If compliance is not achieved, the 
Agency will deny the request for financial assistance.


Sec.  1970.152  EIS funding and professional services.

    (a) Funding for EISs. Unless otherwise approved by the Agency, an 
applicant must fund an EIS and any supplemental documentation prepared 
in support of an applicant's proposal.
    (b) Acquisition of professional services. The Agency will determine 
the appropriate procurement method for acquiring any environmental 
professional services for EISs. Environmental professional services may 
be acquired at the discretion of the Agency through the methods 
specified in 40 CFR 1506.5(c). In accordance with 40 CFR 1506.5(c) and 
to avoid any conflicts of interest, the Agency is responsible for 
selecting an EIS contractor and the applicant must not initiate the 
procurement of an EIS contractor without prior written approval from 
the Agency.
    (b) EIS scope and content. The Agency will prepare the scope of 
work for the preparation of the EIS and will be responsible for the 
scope, content and development of the EIS prepared by the contractor(s) 
hired or selected by the Agency.
    (c) Agreement Outlining Party Roles and Responsibilities. For each 
EIS, an agreement will be executed by the Agency, the applicant, and 
each third-party contractor, which describes each party's roles and 
responsibilities during the EIS process.
    (d) Disclosure statement. A disclosure statement will be prepared 
by the Agency and executed by each EIS contractor. The disclosure 
statement will specify that the contractor has no financial or other 
interest in the outcome of the proposal.


Sec.  1970.153  Notice of Intent and scoping.

    (a) Notice of Intent. The Agency will publish a Notice of Intent 
(NOI) in the Federal Register that an EIS will be prepared and, if 
public scoping meetings are required, the notice will be published at 
least 14 days prior to the public scoping meeting(s).
    (1) The NOI will include a description of the following: The 
applicant's proposal and possible alternatives; the Agency's scoping 
process including plans for possible public scoping meetings with time 
and locations; background information if available; and contact 
information for Agency staff who can answer questions regarding the 
proposal and the EIS.
    (2) The applicant must publish a notice similar to the NOI, as 
directed and approved by the Agency, in one or more newspapers of local 
circulation, or provide similar information through other distribution 
methods as approved by the Agency. If public scoping meetings are 
required, such notices must be published at least 14 days prior to each 
public scoping meeting. The applicant must obtain an ``affidavit of 
publication'' or other such proof from all publications (or equivalent 
verification if other distribution methods were used) and must submit 
them to the Agency to be made a part of the EIS's Administrative 
Record.
    (b) Scoping. In addition to the Agency and applicant 
responsibilities for public involvement identified in Sec.  1970.14 and 
as part of early planning for the proposal, the Agency and the 
applicant must invite affected Federal, State, and local agencies and 
tribes to inform them of the proposal and identify the permits and 
approvals that must be obtained and the administrative procedures that 
must be followed.
    (c) Significant issues. For each scoping meeting held, the Agency 
will determine, as soon as practicable after the meeting, the 
significant issues to be analyzed in depth and identify and eliminate 
from detailed study the issues that are not significant, have been 
covered by prior environmental review, or are not determined to be 
reasonable alternatives.


Sec.  1970.154  Preparation of the EIS.

    (a) The EIS will be prepared in accordance with the format outlined 
at 40 CFR 1502.10.
    (b) The EIS will be prepared using an interdisciplinary approach 
that will ensure the integrated use of the natural and social sciences 
and the environmental design arts. The disciplines of the preparers 
will be appropriate to address the potential environmental impacts 
associated with the proposal. This can be accomplished both in the 
information collection stage and the analysis stage by communication 
and coordination with environmental experts such as those at 
universities; local, state, and Federal agencies; and Indian tribes.
    (c) The Agency will file the draft and final EIS with the U.S. 
Environmental Protection Agency's (EPA) Office of Federal Activities.
    (d) The Agency will publish in the Federal Register a Notice of 
Availability announcing that either the draft or final EIS is available 
for review and comment. The applicant must concurrently publish a 
similar announcement using one or more distribution methods as approved 
by the Agency in accordance with Sec.  1970.14.
    (e) Minimum public comment time periods are calculated from the 
date on which EPA's Notice of Availability is published in the Federal 
Register. The Agency has the discretion to extend any public review and 
comment period if warranted. Notification of any extensions will occur 
through the Federal Register and other media outlets.
    (f) When comments are received on a draft EIS, the Agency will 
assess and consider comments both individually and collectively. With 
support from the third-party contractor and the applicant, the Agency 
will develop responses to the comments received. Possible responses to 
public comments include: Modifying the alternatives considered; 
negotiating with the applicant to modify or mitigate specific project 
elements of the original proposal; developing and evaluating 
alternatives not previously given serious consideration; supplementing 
or modifying the analysis; making factual corrections; or explaining 
why the comments do not warrant further response.
    (g) If the final EIS requires only minor changes from the draft 
EIS, the Agency may document and incorporate such minor changes through 
errata sheets, insertion pages, or revised sections to be incorporated 
into the draft EIS. In such cases, the Agency will circulate such 
changes together with comments on the draft EIS, responses to comments, 
and other appropriate information as the final EIS. The Agency will not 
circulate the draft EIS again; although, if requested, a copy of the 
draft EIS may

[[Page 6792]]

be provided in a timely fashion to any interested party.


Sec.  1970.155  Supplementing EISs.

    (a) A supplement to a draft or final EIS will be announced, 
prepared, and circulated in the same manner (exclusive of meetings held 
during the scoping process) as a draft and final EIS (see 7 CFR 
1970.154). Supplements to a draft or final EIS will be prepared if:
    (1) There are substantial changes in the proposed action that are 
relevant to environmental concerns; or
    (2) Significant new circumstances or information pertaining to the 
proposal arise which are relevant to environmental concerns and the 
proposal or its impacts.
    (b) The Agency will publish an NOI to prepare a supplement to a 
draft or final EIS.
    (c) The Agency, at its discretion, may issue an information 
supplement to a final EIS where the Agency 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). The Agency and the applicant shall 
concurrently have separate notices 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. The Agency shall take no final action on any proposed 
modification discussed in the information supplement until 30 days 
after the Agency's notice of availability or the applicant's notice is 
published, whichever occurs later.


Sec.  1970.156  Record of Decision.

    (a) The ROD is a concise public record of the Agency's decision. 
The required information and format of the ROD will be consistent with 
40 CFR 1505.2.
    (b) Once a ROD has been executed by the Agency, the Agency will 
issue a Federal Register notice indicating its availability to the 
public.
    (c) The ROD may be signed no sooner than 30 days after the 
publication of EPA's Notice of Availability of the final EIS in the 
Federal Register.


Sec. Sec.  1970.157--1970.200  [Reserved]

PART 1980--GENERAL

0
85. The authority citation for part 1980 continues to read as follows:

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

Subpart E--[AMENDED]

0
86. Revise Sec.  1980.432 to read as follows:


Sec.  1980.432  Environmental requirements.

    The environmental requirements of 7 CFR part 1970, ``Environmental 
Policies and Procedures,'' apply to all financial assistance provided 
in accordance with this subpart.
0
87. Amend Sec.  1980.451 by revising paragraph (i)(3) to read as 
follows:


Sec.  1980.451  Filing and processing applications.

* * * * *
    (i) * * *
    (3) Environmental documentation in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''
* * * * *
0
88. In Sec.  1980.451, amend the table entitled ``Description of Record 
or Form Number and Title'' by removing the 11th, 12th, and 13th entries 
and add, in their place, the following entry:


Sec.  1980.451  Filing and processing applications.

* * * * *

             Description of Record or Form Number and Title
------------------------------------------------------------------------
                                                         Filing position
------------------------------------------------------------------------
 
                              * * * * * * *
Environmental documentation in  Environmental           Environmental
 accordance with 7 CFR part      documentation for       File.
 1970, ``Environmental           Categorical
 Policies and Procedures''.      Exclusion,
                                 Environmental
                                 Assessment or
                                 Environmental Impact
                                 Statement.
                              * * * * * * *
------------------------------------------------------------------------

Chapter XXXV--Rural Housing Service

PART 3560--DIRECT MULTI-FAMILY HOUSING LOANS AND GRANTS

0
89. The authority citation for part 3560 continues to read as follows:

    Authority:  42 U.S.C. 1480.

Subpart I--[AMENDED]

0
90. Amend Sec.  3560.406 by revising paragraph (d)(4) to read as 
follows:


Sec.  3560.406  MFH ownership transfers or sales.

* * * * *
    (d) * * *
    (4) Prior to Agency approval of an ownership transfer or sale, an 
environmental review in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures,'' must be conducted on all 
property related to the ownership transfer or sale. If contamination 
from hazardous substances or petroleum products is found on the 
property, the finding must be disclosed to the Agency and the 
transferee or buyer and must be taken into consideration in the 
determination of the housing project's value.
* * * * *

PART 3565--GUARANTEED RURAL RENTAL HOUSING PROGRAM

0
91. The authority citation for part 3565 continues to read as follows:

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

Subpart G--[AMENDED]

0
92. Amend Sec.  3565.303 by revising paragraph (b)(1) to read as 
follows:


Sec.  3565.303  Issuance of loan guarantee.

* * * * *
    (b) * * *
    (1) Completion by the Agency of an environmental review in 
accordance with 7 CFR part 1970 or successor regulation.
* * * * *

PART 3575--GENERAL

0
93. The authority citation for part 3575 continues to read as follows:

    Authority:  5 U.S.C. 301, 7 U.S.C. 1989.

Subpart A--[AMENDED]

0
94. Revise Sec.  3575.9 to read as follows:


Sec.  3575.9  Environmental requirements.

    Requirements for an environmental review or mitigation actions are 
contained in 7 CFR part 1970, ``Environmental Policies and 
Procedures.'' The lender must assist the Agency to ensure that the 
lender's applicant complies with any mitigation measures required by 
the Agency's environmental review for the purpose of avoiding or 
reducing adverse

[[Page 6793]]

environmental impacts of construction or operation of the facility 
financed with the guaranteed loan. This assistance includes ensuring 
that the lender's applicant is to take no actions (for example, 
initiation of construction) or incur any obligations with respect to 
their proposed undertaking that would either limit the range of 
alternatives to be considered during the Agency's environmental review 
process or which would have an adverse effect on the environment. If 
construction is started prior to completion of the environmental review 
and the Agency is deprived of its opportunity to fulfill its obligation 
to comply with applicable environmental requirements, the application 
for financial assistance will be denied. Satisfactory completion of the 
environmental review process must occur prior to Agency approval of the 
applicant's request or any commitment of Agency resources.

Chapter XLII--Rural Business--Cooperative Service, Rural Utilities 
Service

PART 4274--DIRECT AND INSURED LOANMAKING

0
95. The authority citation for part 4274 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1932 note; 7 U.S.C. 1989.

Subpart D--[AMENDED]

0
96. Amend Sec.  4274.337 by revising paragraph (b) to read as follows:


Sec.  4274.337  Other regulatory requirements.

* * * * *
    (b) Environmental requirements. (1) Unless specifically modified by 
this section, the requirements of 7 CFR part 1970, ``Environmental 
Policies and Procedures,'' apply to this subpart. Intermediaries and 
ultimate recipients must consider the potential environmental impacts 
of their projects at the earliest planning stages and develop plans to 
minimize the potential to adversely impact the environment. Both the 
intermediaries and the ultimate recipients must cooperate and furnish 
such information and assistance as the Agency needs to make any of its 
environmental determinations.
    (2) Environmental documentation will be provided in accordance with 
7 CFR part 1970, ``Environmental Policies and Procedures.''
    (3) For each proposed loan from an intermediary to an ultimate 
recipient using Agency IRP loan funds, the Agency will conclude the 
environmental review required by 7 CFR part 1970, ``Environmental 
Policies and Procedures.'' The results of this review will be used by 
the Agency in making its decision on concurrence in the proposed loan.
* * * * *
0
97. Amend Sec.  4274.343 to revise paragraph (a)(3) to read as follows:


Sec.  4274.343  Application.

    (a) * * *
    (3) Environmental documentation in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures;''
* * * * *
0
98. Amend Sec.  4274.361 by revising paragraph (b)(2) to read as 
follows:


Sec.  4274.361  Requests to make loans to ultimate recipients.

* * * * *
    (b) * * *
    (2) Environmental documentation in accordance with 7 CFR part 1970, 
``Environmental Policies and Procedures.''
* * * * *

PART 4279--GUARANTEED LOANMAKING

0
99. The authority citation for Part 4279 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1932(a); and 7 U.S.C. 1989.

Subpart A--[AMENDED]

0
100. Amend Sec.  4279.30 by revising paragraph (c) to read as follows:


Sec.  4279.30  Lenders' functions and responsibilities.

* * * * *
    (c) Environmental responsibilities. Lenders have a responsibility 
to become familiar with Federal environmental requirements; to 
consider, in consultation with the prospective borrower, the potential 
environmental impacts of their proposals at the earliest planning 
stages; and to develop proposals that minimize the potential to 
adversely impact the environment. Lenders must alert the Agency to any 
controversial environmental issues related to a proposed project or 
items that may require extensive environmental review. Lenders must 
help the borrower prepare environmental documentation in accordance 
with 7 CFR part 1970, ``Environmental Policies and Procedures.''
* * * * *

PART 4284--GRANTS

0
101. The authority citation for part 4284 continues to read in part as 
follows:

    Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.
* * * * *

Subpart A--[AMENDED]

0
102. Amend Sec.  4284.16 by revising paragraph (a) to read as follows:


Sec.  4284.16  Other considerations.

    (a) Environmental review. Provide environmental documentation in 
accordance with 7 CFR part 1970, ``Environmental Policies and 
Procedures.''
* * * * *

Subpart G--[AMENDED]

0
103. Amend Sec.  4284.630 by revising paragraph (b) to read as follows:


Sec.  4284.630  Other considerations.

* * * * *
    (b) Environmental review. Provide environmental documentation in 
accordance with 7 CFR part 1970, ``Environmental Policies and 
Procedures.''
* * * * *

PART 4290--RURAL BUSINESS INVESTMENT COMPANY (``RBIC'') PROGRAM

0
104. The authority citation for part 4290 continues to read as follows:

    Authority: 7 U.S.C. 1989 and 2009cc et seq.

Subpart M--[AMENDED]

0
105. Amend Sec.  4290.1940 to revise paragraph (h) to read as follows:


Sec.  4290.1940  Integration of this part with other regulations 
application to USDA's programs.

* * * * *
    (h) Environmental requirements. To the extent applicable to this 
part, the Secretary will comply with 7 CFR part 1970, ``Environmental 
Policies and Procedures.'' The Secretary has not delegated this 
responsibility to SBA pursuant to Sec.  4290.45.
* * * * *


Sec. Sec.  1781.11 and 4279.165  [AMENDED]

0
106. Remove the words ``subpart G of part 1940 of this title'' and add, 
in their place, the words `7 CFR part 1970, ``Environmental Policies 
and Procedures'' ' in the following places:
0
a. 7 CFR 1781.11(g); and
0
b. 7 CFR 4279.165(b).


Sec. Sec.  1924.6, 1940.968, 1942.2, 1942.126, 1944.66, 1944.523, 
1944.526, 1948.62, 1948.84, 1951.210, 1955.10, 1955.66, 1962.30, and 
Exhibits I and J to Subpart A of Part 1924  [AMENDED]

0
107. Remove the words ``subpart G of part 1940 of this chapter'' and 
add, in

[[Page 6794]]

their place, the words `7 CFR part 1970, ``Environmental Policies and 
Procedures,'' ' in the following places:
0
a. 7 CFR 1924.6(a)(9);
0
b. 7 CFR part 1924, subpart A, Exhibit I, Section 300, Site Design, 
301-1 General;
0
c. 7 CFR part 1924, subpart A, Exhibit J, Part B, paragraph I.D.;
0
d. 7 CFR part 1924, subpart A, Exhibit J, Part B, paragraph II.A.;
0
e. 7 CFR 1940.968(h)(2);
0
f. 7 CFR 1942.2(b);
0
g. 7 CFR 1942.126(l)(6)(i)(E);
0
h. 7 CFR 1944.66(c);
0
i. 7 CFR 1944.523(b);
0
j. 7 CFR 1944.526(b)(1)(i);
0
k. 7 CFR 1948.62(a);
0
l. 7 CFR 1948.84(e)(2);
0
m. 7 CFR 1951.210;
0
n. 7 CFR 1955.10;
0
o. 7 CFR 1955.66 introductory text; and
0
p. 7 CFR 1962.30(b)(5).


Sec. Sec.  1924.106, 3550.5, 3550.159, 3560.3, 3560.54, 3560.56, 
3560.59, 3560.71, 3560.73, 3560.407, 3560.408, 3560.409, 3560.458, 
3565.7, 3565.205, 3565.255, 3570.69, 4280.36, 4280.41, 4280.116, and 
4280.131  [AMENDED]

0
108. Remove the words ``7 CFR part 1940, subpart G'' and add, in their 
place, the words `7 CFR part 1970, ``Environmental Policies and 
Procedures.'' ' in the following places:
0
a. 7 CFR 1924.106(a) introductory text;
0
b. 7 CFR 3550.5(b);
0
c. 7 CFR 3550.159(c)(5);
0
d. 7 CFR 3560.3;
0
e. 7 CFR 3560.54(b)(4);
0
f. 7 CFR 3560.56(d)(7);
0
g. 7 CFR 3560.59;
0
h. 7 CFR 3560.71(b)(4);
0
i. 7 CFR 3560.73(e);
0
j. 7 CFR 3560.407(a);
0
k. 7 CFR 3560.408(a);
0
l. 7 CFR 3560.409(a) introductory text;
0
m. 7 CFR 3560.458(d);
0
n. 7 CFR 3565.7;
0
o. 7 CFR 3565.205(b);
0
p. 7 CFR 3565.255;
0
q. 7 CFR 3570.69;
0
r. 7 CFR 4280.36(k);
0
s. 7 CFR 4280.41(b);
0
t. 7 CFR 4280.116(a)(2); and
0
u. 7 CFR 4280.131(c).

Appendix A to Subpart B of Part 480 and Appendix B to Subpart B of Part 
480 [AMENDED]

0
109. Remove the words ``Identify all environmental issues, including 
any compliance issues associated with or expected as a result of the 
project on Form RD 1940-20, ``Request for Environmental Information,'' 
and in compliance with 7 CFR part 1940, subpart G of this title'' and 
add, in their place, the words ``Provide environmental information in 
accordance with part 1970 of this title'' in the following places:
0
a. 7 CFR part 4280, App A, Sec 1, paragraph (b)(3);
0
b. 7 CFR part 4280, App A, Sec 2, paragraph (b)(3);
0
c. 7 CFR part 4280, App A, Sec 3, paragraph (b)(3);
0
d. 7 CFR part 4280, App A, Sec 4, paragraph (b)(2);
0
e. 7 CFR part 4280, App A, Sec 5, paragraph (b)(3);
0
f. 7 CFR part 4280, App A, Sec 6, paragraph (b)(3);
0
g. 7 CFR part 4280, App A, Sec 7, paragraph (b)(3);
0
h. 7 CFR part 4280, App A, Sec 8, paragraph (b)(3);
0
i. 7 CFR part 4280, App A, Sec 9, paragraph (b)(3);
0
j. 7 CFR part 4280, App A, Sec 10, paragraph (b)(2);
0
k. 7 CFR part 4280, App B, Sec 1, paragraph (b)(7);
0
l. 7 CFR part 4280, App B, Sec 2, paragraph (b)(7);
0
m. 7 CFR part 4280, App B, Sec 3, paragraph (b)(6);
0
n. 7 CFR part 4280, App B, Sec 4, paragraph (b)(6);
0
o. 7 CFR part 4280, App B, Sec 5, paragraph (b)(7);
0
p. 7 CFR part 4280, App B, Sec 6, paragraph (b)(4);
0
q. 7 CFR part 4280, App B, Sec 7, paragraph (b)(4);
0
r. 7 CFR part 4280, App B, Sec 8, paragraph (b)(4);
0
s. 7 CFR part 4280, App B, Sec 9, paragraph (b)(5); and
0
t. 7 CFR part 4280, App B, Sec 10, paragraph (b)(3).


Sec. Sec.  1924.106, 1980.316, 1980.318 and Exhibit J to Subpart A of 
Part 1924  [AMENDED]

0
110. Remove the words ``subpart G of part 1940'' and add, in their 
place, the words ``7 CFR part 1970, `Environmental Policies and 
Procedures' '' in the following places:
0
a. 7 CFR 1924.106(a)(2);
0
b. 7 CFR part 1924, subpart A, Exhibit J, Part B, paragraph III.A.;
0
c. 7 CFR 1980.316; and
0
d. 7 CFR 1980.318(a)(3).

    Dated: December 19, 2013.
Douglas J. O'Brien,
Deputy Under Secretary, Rural Development.
    Dated: December 23, 2013.
Darci L. Vetter,
Acting Under Secretary, Farm and Foreign Agricultural Services.
[FR Doc. 2014-00220 Filed 2-3-14; 8:45 am]
BILLING CODE 3410-XV-P