Floodplain Management and Protection of Wetlands; Minimum Property Standards for Flood Hazard Exposure; Building to the Federal Flood Risk Management Standard, 17755-17776 [2023-05699]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 88, Number 57 (Friday, March 24, 2023)]
[Proposed Rules]
[Pages 17755-17776]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-05699]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 50, 55, 58, and 200

[Docket No. FR-6272-P-01]
RIN 2506-AC54


Floodplain Management and Protection of Wetlands; Minimum 
Property Standards for Flood Hazard Exposure; Building to the Federal 
Flood Risk Management Standard

AGENCY: Office of the Secretary, HUD.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would revise HUD's regulations governing 
floodplain management and the protection of wetlands to implement the 
Federal Flood Risk Management Standard (FFRMS), in accordance with the 
Executive order, ``Establishing a Federal Flood Risk Management 
Standard and a Process for Further Soliciting and Considering 
Stakeholder Input,'' to improve the resilience of HUD-assisted or 
financed projects to the effects of climate change and natural 
disasters, and provide for greater flexibility in the use of HUD 
assistance in floodways under certain circumstances. Among other 
revisions, the rule would provide a process for determining the FFRMS 
Floodplain that would establish a preference for the climate-informed 
science approach (CISA), and it would revise HUD's floodplain and 
wetland regulations to streamline them, improve overall clarity, and 
modernize standards. This proposed rule would also revise HUD's Minimum 
Property Standards for one-to-four unit housing under HUD mortgage 
insurance and under low-rent public housing programs to require that 
the lowest floor in both newly constructed and substantially improved 
structures located within the 1-percent-annual-chance (100-year) 
floodplain be built at least 2 feet above the base flood elevation as 
determined by best available information, and it would revise a 
categorical exclusion when HUD performs environmental reviews, and 
update various HUD environmental regulations to permit online posting 
of public notices.

DATES: Comment Due Date: May 23, 2023.

ADDRESSES: Interested persons are invited to submit public comments 
regarding this proposed rule using one of the two methods for 
submitting public comments described below. All submissions must refer 
to the above docket number and title.

[[Page 17756]]

    1. Submission of Comments by Mail. Comments may be submitted by 
mail to the Regulations Division, Office of General Counsel, Department 
of Housing and Urban Development, 451 7th Street SW, Room 10276, 
Washington, DC 20410-0500.
    2. Electronic Submission of Comments. Interested persons may submit 
comments electronically through the Federal eRulemaking Portal at 
www.regulations.gov. HUD strongly encourages commenters to submit 
comments electronically. Electronic submission of comments allows the 
commenter maximum time to prepare and submit a comment, ensures timely 
receipt by HUD, and enables HUD to make them immediately available to 
the public. Comments submitted electronically through the 
www.regulations.gov website can be viewed by other commenters and 
interested members of the public. Commenters should follow the 
instructions provided on that site to submit comments electronically.

    Note: To receive consideration as public comments, comments must 
be submitted through one of the two methods specified above. Again, 
all submissions must refer to the docket number and title of the 
rule.

    No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
    Public Inspection of Public Comments. All properly submitted 
comments and communications submitted to HUD will be available for 
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the 
above address. Due to security measures at the HUD Headquarters 
building, an appointment to review the public comments must be 
scheduled in advance by calling the Regulations Division at 202-708-
3055 (this is not a toll-free number). HUD welcomes and is prepared to 
receive calls from individuals who are deaf or hard of hearing, as well 
as individuals with speech and communication disabilities. To learn 
more about how to make an accessible telephone call, please visit 
https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs. Copies of all comments submitted are available for inspection and 
downloading at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Kristin L. Fontenot, Director, Office 
of Environment and Energy, Office of Community Planning and 
Development, Department of Housing and Urban Development, 451 7th 
Street SW, Room 7282, Washington, DC 20410-8000. For inquiry by phone 
or email, contact Lauren Hayes Knutson, Director, Environmental 
Planning Division, Office of Environment and Energy, Office of 
Community Planning and Development, at 202-402-4270 (this is not a 
toll-free number), or email to: [email protected]. For questions 
regarding the Minimum Property Standards, contact Kevin Stevens, Acting 
Director, Office of Single Family Program Development, 202-402-4317. 
HUD welcomes and is prepared to receive calls from individuals who are 
deaf or hard of hearing, as well as individuals with speech and 
communication disabilities. To learn more about how to make an 
accessible telephone call, please visit https://www.fcc.gov/consumers/guides/telecommunications-relay-service-trs.

SUPPLEMENTARY INFORMATION:

I. Background

    In the past decade alone, there were over 1,100 direct flood 
fatalities in the United States.\1\ With climate change and associated 
sea-level rise, flooding risks have increased over time, and are 
anticipated to continue increasing. The Fourth National Climate 
Assessment (2018), for example, projects that tide flooding will become 
more disruptive and costlier in the coming decades. Observed increases 
in the frequency and intensity of heavy precipitation events in most 
parts of the United States are projected to continue, with increased 
Atlantic and eastern North Pacific hurricane rainfall and intensity and 
increasing frequency and severity of landfalling ``atmospheric rivers'' 
on the West Coast.\2\ Severe flooding can cause significant damage to 
infrastructure, including buildings, roads, ports, industrial 
facilities, and even coastal military installations. Since 1980, the 
U.S. has sustained 323 weather and climate disasters where the overall 
damage costs reached or exceeded $1 billion, with total costs exceeding 
$2.195 trillion.\3\ It is therefore necessary to take action to 
responsibly use Federal funds, and HUD must ensure it makes Federal 
investments wisely to minimize losses, particularly following repeated 
flooding events.
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    \1\ https://www.weather.gov/arx/usflood.
    \2\ The Fourth National Climate Assessment is available at 
https://nca2018.globalchange.gov/downloads/NCA4_2018_FullReport.pdf.
    \3\ https://www.ncei.noaa.gov/access/billions/.
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    In response to the threats that increasing flood risks pose to life 
and taxpayer funded property, on January 30, 2015, President Obama 
signed Executive Order (E.O.) 13690, Establishing a Federal Flood Risk 
Management Standard and a Process for Further Soliciting and 
Considering Stakeholder Input. Significantly, E.O. 13690 amended E.O. 
11988, Floodplain Management, issued in 1977 \4\ by, among other 
things, revising Section 6(c) of E.O. 11988 to provide new approaches 
to establish the floodplain. E.O. 13690 provided, however, that prior 
to any actions implementing E.O. 13690, additional input from 
stakeholders be solicited and considered. Consistent with this 
direction, the Federal Emergency Management Agency (FEMA), as Chair of 
the Mitigation Framework Leadership Group (MitFLG,\5\) published a 
notice in the Federal Register seeking comment on the proposed 
``Revised Guidelines for Implementing Executive Order 11988, Floodplain 
Management'' to provide guidance to agencies on the implementation of 
E.O. 13690 and 11988 (80 FR 6530, February 5, 2015). On March 26, 2015 
(80 FR 16018), FEMA on behalf of MitFLG published a notice in the 
Federal Register extending the public comment period for 30 days until 
May 6, 2015. MitFLG held 9 public listening sessions across the country 
that were attended by over 700 participants from State and local 
governments and other stakeholder organizations to discuss the 
Guidelines.\6\ MitFLG considered stakeholder input and provided 
recommendations to the U.S. Water Resources Council (WRC).\7\
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    \4\ E.O. 13690 was published in the Federal Register on February 
4, 2015 (80 FR 6425). Throughout this document, references to E.O. 
11988 as amended by E.O. 13690 will be referred to as ``E.O. 11988, 
as amended.'' References to E.O. 11988 as published in 1977 will 
simply be referred to as ``E.O. 11988.''
    \5\ The Mitigation Framework Leadership Group (MitFLG) is a 
senior level group formed in 2013 to coordinate mitigation efforts 
across the Federal Government and to assess the effectiveness of 
mitigation capabilities as they are developed and deployed across 
the Nation. The MitFLG includes relevant local, state, tribal, and 
Federal organizations. The balance of non-Federal members ensures 
appropriate integration of Federal efforts across the whole 
community. More information about MitFLG can be found at https://www.fema.gov/emergency-managers/national-preparedness/frameworks/mitigation/mitflg.
    \6\ Specific information on the listening sessions can be found 
in the notices on the docket at https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Notice. Transcripts of those 
sessions are available on the docket at https://www.regulations.gov/docket/FEMA-2015-0006/document?documentTypes=Supporting%20%26%20Related%20Material.
    \7\ The U.S. Water Resources Council (WRC) is a statutory body 
tasked to maintain a continuing study and prepare an assessment of 
the adequacy of supplies of water necessary to meet the water 
requirements in each water resource region in the United States and 
the national interest therein. 42 U.S.C. 1962a. The WRC is a means 
for the coordination of the water and related land resources 
policies and programs of several Federal agencies. The WRC is 
composed of the Secretary of the Interior, the Secretary of 
Agriculture, the Secretary of the Army, the Secretary of Commerce, 
the Secretary of Housing and Urban Development, the Secretary of 
Transportation, the Administrator of the Environmental Protection 
Agency, and the Secretary of Energy.

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[[Page 17757]]

    On October 8, 2015, the WRC issued updated ``Guidelines for 
Implementing Executive Order 11988, Floodplain Management, and 
Executive Order 13690, Establishing a Federal Flood Risk Management 
Standard and a Process for Further Soliciting and Considering 
Stakeholder Input'' (Guidelines).\8\ The Guidelines state that although 
the Guidelines describe various approaches for determining the higher 
vertical flood elevation and corresponding horizontal floodplain for 
federally funded projects, they are not meant to be an elevation 
standard, but rather a resilience standard. However, the Guidelines 
provide that all future actions where Federal funds are used for new 
construction, substantial improvement,\9\ or to address substantial 
damage \10\ meet the level of resilience established by the Guidelines. 
In implementing the Guidelines and establishing the Federal Flood Risk 
Management Standard (FFRMS), Federal agencies were to select among the 
following three approaches for establishing the flood elevation and 
hazard area in siting, design, and construction:
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    \8\ Available at: https://www.fema.gov/sites/default/files/documents/fema_implementing-guidelines-EO11988-13690_10082015.pdf. 
HUD notes that the WRC is not currently active.
    \9\ HUD currently defines substantial improvement in 24 CFR 
55.2(b). This proposed rule would not change this definition except 
by moving it from its current location in Sec.  55.2(b)(10) to 
proposed Sec.  55.2(b)(12) to reflect other changes to that section.
    \10\ Substantial damage is defined in FEMA regulations at 44 CFR 
59.1 as ``damage of any origin sustained by a structure whereby the 
cost of restoring the structure to its before damaged condition 
would equal or exceed 50 percent of the market value of the 
structure before the damage occurred.'' For more information on 
substantial improvement and substantial damage, see https://www.fema.gov/sites/default/files/2020-08/fema_p_758_complete_r3_0.pdf.
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     Climate-Informed Science Approach (CISA): The elevation 
and flood hazard area that result from using a climate-informed science 
approach that uses the best-available, actionable hydrologic and 
hydraulic data,
     Freeboard \11\ Value Approach (FVA): The elevation and 
flood hazard area that result from using the freeboard value, reached 
by adding an additional 2 feet to the base flood elevation (the 100-
year, or 1-percent-annual-chance flood elevation) for non-critical 
actions and by adding an additional 3 feet to the base flood elevation 
for critical actions, or
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    \11\ Freeboard is defined by FEMA as ``a factor of safety 
usually expressed in feet above a flood level for purposes of 
floodplain management.`Freeboard' tends to compensate for the many 
unknown factors that could contribute to flood heights greater than 
the height calculated for a selected size flood and floodway 
conditions, such as wave action, bridge openings, and the 
hydrological effect of urbanization of the watershed.'' See 44 CFR 
59.1. See also https://www.fema.gov/freeboard.
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     0.2-Percent-Annual-Chance (500-Year) Flood Approach: The 
elevation and flood hazard area that result from using the 0.2-percent-
annual-chance flood approach (500-year flood elevation).
    The FVA and 0.2-percent-annual-chance flood approach result in 
higher elevations than regulating to base flood elevation with 
correspondingly larger horizontal floodplain areas. CISA will generally 
have a similar result, with the exception that agencies using CISA may 
find the resulting elevation to be equal to or lower than the current 
elevation in some areas due to the nature of the specific climate 
change processes and physical factors affecting flood risk at the 
project site. However, as a matter of policy established in the 
Guidelines, CISA can only be used if the resulting flood elevation is 
equal to or higher than current base flood elevation.
    E.O. 11988, issued May 24, 1977 (published in the Federal Register 
on May 25, 1977, at 42 FR 26951), directs Federal agencies to avoid, to 
the extent possible, the long- and short-term adverse impacts 
associated with the occupancy and modification of floodplains and to 
avoid direct and indirect support of floodplain development wherever 
there is a practicable alternative. Floodplains are found both in 
coastal flood areas, where rising tides and storm surge are often 
responsible for flooding, and in riverine flood areas where moving 
water bodies may overrun their banks due to heavy rains or snow melt. 
E.O. 11988 recommended the use of FEMA floodplain maps to identify the 
floodplain area. Because flood risk can change over time, FEMA 
continually revises Flood Insurance Rate Maps (FIRMs), advisory base 
flood elevations, and preliminary floodplain maps and studies to 
incorporate new information and reflect current understanding of flood 
risk.
    Prior to E.O. 13690, a floodplain for E.O. 11988 purposes referred 
to the lowland and relatively flat areas adjoining inland and coastal 
waters including flood-prone areas of offshore islands, including at a 
minimum that area subject to a one percent or greater chance of 
flooding in any given year (referred to as the ``1-percent-annual-
chance flood,'' ``100-year'' flood or ``base flood''). E.O. 13690 
amended E.O. 11988 to direct agencies to update the original E.O. 11988 
floodplain using one (or a combination) of the three approaches listed 
above, which are incorporated in the FFRMS.
    To move towards implementing E.O. 13690, HUD published a proposed 
rule on October 28, 2016, titled ``Floodplain Management and Protection 
of Wetlands; Minimum Property Standards for Flood Hazard Exposure; 
Building to the Federal Flood Risk Management Standard'' (81 FR 74967). 
E.O. 13690 was revoked by E.O. 13807 of August 15, 2017 (Establishing 
Discipline and Accountability in the Environmental Review and 
Permitting Process for Infrastructure Projects), and HUD subsequently 
withdrew the proposed rule from its Unified Agenda of Regulatory and 
Deregulatory Actions on December 22, 2017 (82 FR 60693). E.O. 13690 was 
reinstated by E.O. 14030 of May 20, 2021 (Climate-Related Financial 
Risk), published at 86 FR 27967.
    Thousands of communities across the country have already 
strengthened their local floodplain management codes and standards to 
ensure that buildings and infrastructure are resilient to flood risk. 
By implementing the FFRMS, HUD's standards will better align with these 
actions. At the same time, HUD recognizes that the need to make 
structures resilient also requires a flexible approach to adapt to the 
needs of the Federal agency, local community, and the circumstances 
surrounding each project or action.

II. Existing HUD Standards and the 2016 Proposed Rule

    Consistent with E.O. 11988, when no practicable alternative exists 
to development in flood-prone areas, HUD requires the design or 
modification of the proposed action to minimize potential adverse 
impact to and from flooding. HUD has used and continues to use the term 
``adverse impacts'' synonymously with the term ``harm'' throughout its 
regulations in part 55. HUD has implemented E.O. 11988 and its 8-step 
decisionmaking process through regulations at 24 CFR part 55. The 8-
step decisionmaking process is the compliance process for activities 
occurring in the floodplain and includes a public notice requirement, 
examination of practicable alternatives, evaluation of potential 
impacts, and modifications to minimize adverse impacts. HUD requires 
implementation of the 8-step process by HUD staff or responsible 
entities (States, Indian Tribes, or units of general local government) 
for activities occurring in the floodplain such as new construction of 
infrastructure or substantial improvement of buildings and hospitals. 
HUD requires that HUD-assisted or

[[Page 17758]]

financed construction and improvements (including mortgage insurance 
actions) undergo the 8-step process unless they are subject to an 
exception or categorical exclusion under 24 CFR 50.19, 24 CFR 55.12, 24 
CFR 58.34, or 24 CFR 58.35(b). For example, the 8-step process in Sec.  
55.20 does not apply to HUD's insurance of one- to four-family 
mortgages under the Lender Insurance program, where HUD does not review 
or approve the mortgage insurance before completion of construction or 
rehabilitation and the loan closing, since such mortgage insurance is 
subject to a categorical exclusion under 24 CFR 50.19(b)(17).
    While the 8-step process may not apply to these activities, HUD's 
current Minimum Property Standards at 24 CFR 200.926d require that 
single-family housing newly constructed under HUD mortgage insurance 
and specific low-rent public housing programs have its lowest floor at 
or above the base flood elevation.
    In the wake of recovery from the devastating effects of Hurricane 
Sandy and other flood disasters, HUD's 2016 proposed rule on floodplain 
management and the protection of wetlands was written with the 
intention of ensuring that structures located in flood-prone areas are 
built or rebuilt stronger, safer, and less vulnerable to future 
flooding events. At that time, HUD proposed standards that would have 
been consistent with FVA as described above for HUD assisted or 
financed actions. Structures involving new construction and substantial 
improvements and subject to 24 CFR part 55 would have had to have been 
elevated (for non-critical actions) at least 2 feet above the base 
flood elevation, or (for critical actions) the greater of the 0.2-
percent-annual-chance floodplain or 3 feet above the base flood 
elevation using best available information.\12\ For new or 
substantially improved non-residential structures in the FFRMS 
floodplain that are not critical actions, HUD proposed that the 
structure either be elevated to the same level as residential 
structures, or, alternatively, be designed and constructed such that 
the structure is floodproofed to at least 2 feet above the base flood 
elevation. The 2016 proposed rule also would have revised HUD's Minimum 
Property Standards for one-to-four-unit housing under HUD mortgage 
insurance and low-rent public housing programs to require that both 
newly constructed and substantially improved structures located within 
the 1-percent-annual-chance floodplain be built with the lowest floor 
at least 2 feet above base flood elevation based on best available 
information.
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    \12\ Best available information may be the latest FEMA issued 
data or guidance, including advisory data (such as Advisory Base 
Flood Elevations (ABFE)), preliminary Flood Insurance Rate Maps 
(FIRMs), final FIRMs, or other Federal, State, or local information.
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    In 2016, HUD chose FVA over CISA and the 0.2-percent-annual-chance 
flood approach because it could be applied consistently to any area 
participating in the National Flood Insurance Program (NFIP), and it 
could be calculated using existing flood maps.
    Although the 2016 proposed rule was never finalized, HUD has 
implemented program-specific policies to increase resilience to 
flooding. For example, residential new construction and substantial 
improvements funded with Community Development Block Grant Disaster 
Recovery (CDBG-DR) assistance in the 1-percent-annual-chance floodplain 
are now required to elevate two feet above base flood elevation.\13\ 
Similarly, HUD's Office of Multifamily Housing (MF) recently updated 
its Multifamily Accelerated Processing (MAP) Guide standards for FHA 
multifamily projects to require new construction projects in 1-percent-
annual-chance floodplains to elevate two feet above base flood 
elevation.\14\ The Office of Multifamily Housing has extended the same 
limitations that apply in coastal high hazard areas (V Zones) to all 
areas within the Limit of Moderate Wave Action (LiMWA) for new 
construction and substantial rehabilitation, with lesser but still 
significant limitations on existing properties.\15\
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    \13\ See, e.g., FR-6303-N-01, Allocations for Community 
Development Block Grant Disaster Recovery and Implementation of the 
CDBG-DR Consolidated Waivers and Alternative Requirements Notice 
published at 87 FR 6364 (February 3, 2022). This requirement was 
first implemented for the 2015 class of disaster recovery grantees, 
see FR-5938-N-01, Allocations, Common Application, Waivers, and 
Alternative Requirements for Community Development Block Grant 
Disaster Recovery Grantees Notice published at 81 FR 39687 (June 17, 
2016).
    \14\ See Multifamily Accelerated Processing (MAP) Guide Revision 
March 19, 2021, Page 9-43. Available at: https://www.hud.gov/sites/dfiles/OCHCO/documents/4430GHSGG.pdf.
    \15\ Id. p. 9-42.
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III. This Proposed Rule

    In its 2021 Climate Action Plan,\16\ HUD committed to completing 
rulemaking to update 24 CFR part 55 of its regulations and implement 
FFRMS as a key component of its plan to increase climate resilience and 
climate justice across the Department, noting that low-income families 
and communities of color are disproportionately impacted by climate 
change.\17\ Development of equitable strategies to protect low- to 
moderate-income persons and businesses serving these communities is at 
the core of HUD's mission to create strong, sustainable, inclusive 
communities. As stated in its Climate Action Plan, HUD intends to 
address existing inequities by maximizing investments in low-income 
communities, communities of color, and other disadvantaged and 
historically underserved communities.
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    \16\ https://www.hud.gov/climate.
    \17\ https://nca2018.globalchange.gov/.
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    HUD notes that affordable housing is increasingly at risk from both 
extreme weather events and sea-level rise, and that coastal communities 
are especially at risk. Recent analysis and mapping by independent 
research organization Climate Central projects that the number of 
affordable housing units at risk from flooding in coastal areas will 
triple by 2050,\18\ and a report from the Denali Commission found that 
144 Native Alaskan Villages (43 percent of all Alaskan communities) 
experienced infrastructure damage from erosion, flooding, and 
permafrost thaw.\19\
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    \18\ Maya K. Buchanan et al. (2020). Environ. Res. Lett., 15, 
124020.
    \19\ Alaska Division of Geological & Geophysical Surveys. 
February 23, 2021. Alaska's Environmentally Threatened Communities. 
ArcGIS, https://storymaps.arcgis.com/stories/2a0d221e55ca48dd8092427b50a98804 (interpreting University of Alaska 
Fairbanks Institute of Northern Engineering et al., Statewide Threat 
Assessment: Identification of Threats from Erosion, Flooding, and 
Thawing Permafrost in Remote Alaska Communities--Report Prepared for 
the Denali Commission, November, 2019, available at https://www.denali.gov/wp-content/uploads/2019/11/Statewide-Threat-Assessment-Final-Report-20-November-2019.pdf.
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    HUD's experience in the wake of flood disasters is that unless 
structures in flood-prone areas are properly designed, constructed, and 
elevated, they may not withstand future severe flooding events. This is 
exacerbated by climate change and projected increases in hurricane 
rainfall and intensity as well as other precipitation throughout most 
of the United States. It is therefore critical that HUD take a forward-
looking approach to floodplain management, basing decisions not just on 
past flooding but on how flood risk is anticipated to grow and change 
over the anticipated life of a project.
    HUD's regulations in 24 CFR part 55 currently rely on FEMA FIRMs, 
which map the 1-percent-annual-chance (100-year) floodplain based on 
historic flood data. These maps are critical resources when assessing 
flood risk, but they are not intended to reflect changes in future 
flood risk influenced by a changing climate. This rule would expand 
HUD's floodplain of concern from the

[[Page 17759]]

1-percent-annual-chance floodplain to the FFRMS floodplain, designated 
based on projected future risk, to ensure that HUD projects are 
designed with a more complete picture of a proposed project site's 
flood risk over time.
    Flood risk projection based on current climate science can help HUD 
meet the original objectives of E.O. 11988, including avoidance of 
floodplain impacts and minimization of such impacts where there is no 
practicable alternative to locating a HUD-assisted activity in 
proximity to flood sources. Together with the use of natural systems, 
ecosystem processes, and nature-based approaches to preservation of 
beneficial floodplain function, adequate elevation of structures is a 
key minimization strategy.
    As recognized by MitFLG and directed by the FFRMS and E.O. 13690, 
requiring structures to be elevated or floodproofed to an additional 
elevation above the base flood elevation will increase resiliency and 
reduce loss of life, property damage, and other economic loss, and can 
also benefit homeowners by reducing flood insurance rates. These higher 
elevations provide an extra buffer above the base flood elevation based 
on the best available information to improve the long-term resilience 
of communities. Additionally, higher elevation standards help account 
for increased flood risk associated with projected sea level rise, 
increased rainfall, and other climate risks, which are not considered 
in current FEMA maps and flood insurance costs. As stated in ``Global 
and Regional Sea Level Rise Scenarios for the United States'' (February 
2022) by the U.S. Department of Commerce, National Oceanic and 
Atmospheric Administration (NOAA) \20\ scientists are confident that 
global sea level will rise by between about 1 and 6.555 feet by 
2100.\21\ Higher elevation standards will address the lower end of this 
projection, while also allowing for greater impacts to be addressed as 
well.
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    \20\ https://oceanservice.noaa.gov/hazards/sealevelrise/sealevelrise-tech-report-sections.html.
    \21\ See https://toolkit.climate.gov/topics/coastal/sea-level-rise.
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    Requiring additional elevation above the base flood elevation may 
also lead to a net reduction of expected housing costs over time. HUD's 
mission is to create strong, sustainable, inclusive communities and 
quality affordable homes for all. Flood insurance is a key financial 
tool to manage potential rebuilding costs but can make homes in risky 
areas less affordable. By elevating additional feet above the base 
flood elevation, homeowners may benefit from flood insurance premium 
reductions that will increase long-term affordability.
    As previously discussed, in 2016, HUD chose FVA for defining 
floodplains. Since 2016, the Federal Government has developed and made 
publicly available additional flood risk hazard information in coastal 
areas based on climate informed science, including sea-level rise 
predictions. Record storms have provided additional data on the flood 
risk faced by inland areas, and climate mapping efforts have proceeded 
at the Federal and State level.
    HUD has thus reconsidered its policy approach and now prefers the 
CISA approach because it provides a forward-looking assessment of flood 
risk based on likely or potential climate change scenarios, regional 
climate factors, and an advanced scientific understanding of these 
effects. Therefore, in this proposed rule, the required level of flood 
resilience for floodplain management decisionmaking, elevation of 
structures, and floodproofing would be established using CISA for areas 
where CISA analysis following the Guidelines has been approved by HUD. 
HUD intends to rely on CISA tools and implementation resources being 
developed by a subgroup of the White House Flood Resilience Interagency 
Working Group to implement CISA analysis. Where CISA data is not 
available to define the FFRMS floodplain, the level of flood resilience 
would be based on the FEMA-mapped 0.2-percent-annual-chance (500-year) 
floodplain or a freeboard height above the FEMA-mapped 1-percent-
annual-chance floodplain depending on the criticality of the action, 
based on available data.
    Beyond proposing to implement FFRMS floodplain and elevation 
requirements, HUD is proposing broader changes to modernize and improve 
24 CFR part 55 in accordance with the Department's climate adaptation, 
environmental justice, and equity priorities. These revisions would 
explicitly recognize HUD's responsibility to consider the environmental 
justice impact of the Department's actions within the floodplain 
management and decisionmaking process. To more effectively and 
efficiently meet HUD's affordable housing and community development 
mission, the rule would also streamline decisionmaking for activities 
that mitigate flood risk, avoid wetland losses, or provide co-benefits 
that directly contribute to HUD's efforts to reduce climate impacts. 
HUD is also seeking to strengthen the commitment to use nature-based 
floodplain management approaches where practicable by identifying 
specific strategies and practices that have proven effective in 
increasing flood resilience and environmental quality.
    HUD notes that just as its existing regulations pertaining to 
floodplain management and the protection of wetlands must be applied in 
conjunction with other statutory and regulatory authorities, adherence 
to these proposed regulatory revisions would not modify any party's 
responsibilities or obligations under any other Federal laws, including 
statutes and regulations administered by other Federal agencies.

A. Federal Flood Risk Management Standard (FFRMS) Floodplain

    To implement this framework, HUD proposes to define the FFRMS 
floodplain in a new section 24 CFR 55.7. This section would establish a 
three-tiered approach to define the FFRMS floodplain, depending on the 
data and mapping available in the project area.
    1. Climate Informed Science Approach (CISA): The FFRMS floodplain 
would be defined as areas designated as having an elevated flood risk 
during the anticipated life of the project based on CISA, wherever maps 
developed using CISA are available and have been approved by HUD. The 
CISA approach for critical actions will generally use the same 
methodology as the approach for non-critical actions, but selection of 
climate change scenarios used for future projections should account for 
the lower tolerance of risk based on the action's criticality. Where 
part 55 applies,\22\ CISA would be the required methodology to define 
the FFRMS floodplain if HUD-approved maps are available. When preparing 
an Environmental Impact Statement (EIS), an analysis of sea level rise 
and other climate impacts utilizing climate informed science, future 
projection, and other climate risk tools would be required regardless 
of whether pre-existing CISA maps are available for reference. Pursuant 
to the Guidelines, a base flood elevation based on CISA data cannot be 
used if it is lower than the current FIRM or Flood Insurance Study 
(FIS). Under this proposed rule, a responsible entity would have the 
option of using CISA at the project-specific level to define the FFRMS 
floodplain even where it is not required, but only where this results 
in a higher

[[Page 17760]]

elevation than would be required using the 0.2-percent-annual-chance 
(500-year) and freeboard value methods.
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    \22\ All HUD programs, with the exception of programs that are 
not subject to NEPA (e.g., the FHA single family program subject to 
the Minimum Property Standards, and the Housing Trust Fund), are 
subject to Part 55. Certain projects may be exempt from Part 55 
based on project activities (see Sec.  55.12 of this proposed rule).
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    2. 0.2 Percent-Annual-Chance Flood Approach (500-year Floodplain 
Approach): For non-critical actions, where CISA maps or other types of 
CISA analysis are not available, but FEMA has defined the 0.2-percent-
annual-chance floodplain, the FFRMS floodplain would be defined as 
those areas that FEMA has designated as within the 0.2-percent-annual-
chance floodplain, and structures would need to be elevated to or above 
the 0.2-percent-annual-chance floodplain.
    3. Freeboard Value Approach (FVA): If neither CISA nor FEMA-mapped 
0.2-percent-annual-chance floodplain data is available, for non-
critical actions, the FFRMS floodplain would be defined as those areas 
that result from adding an additional two feet to the base flood 
elevation as established by the effective FEMA FIRM or FIS or--if 
available--a FEMA-provided preliminary or pending FIRM or FIS or 
advisory base flood elevations, whether regulatory or informational in 
nature. However, an interim or preliminary FEMA map could not be used 
if it is lower than the current FIRM or FIS.
    For critical actions where CISA data is not available, the FFRMS 
floodplain would be either the area within the 0.2-percent-annual-
chance floodplain or the area that results from adding an additional 
three feet to the base flood elevation, whichever is higher. The larger 
floodplain and higher elevation would need to be applied where the 0.2-
percent-annual-chance floodplain is mapped.
    If CISA maps are not available and FEMA FIRMs, FIS, preliminary 
maps and advisory base flood elevations are unavailable or 
insufficiently detailed to determine base flood elevation, other 
Federal, State, local, or Tribal data could be used as ``best available 
information'' to define the 1-percent-annual-chance floodplain. For 
non-critical actions, the FFRMS floodplain would be the area that 
results from adding an additional two feet to the base flood elevation 
based on best available information. For critical actions, the FFRMS 
floodplain would be the greater of either the 0.2-percent-annual-chance 
floodplain based on best available information or areas that result 
from adding an additional three feet to the base flood elevation based 
on best available information. Where the 0.2-percent-annual-chance 
floodplain is mapped, the larger floodplain and higher elevation must 
be applied. When these cases arise, HUD will provide guidance regarding 
what other Federal, State, local, or Tribal data may be sufficient to 
be used as ``best available information.''

B. Revised Definitions

    This proposed rule would revise various definitions in 24 CFR 55.2. 
The definition of best available information is currently appended to 
the definition of ``coastal high hazard area'' (the coastal area 
subject to high velocity waters from wind and wave hazards, as 
designated on a FIRM or FIS or in best available information), but 
applies to coastal high hazard areas, floodplains, and floodways alike. 
This organizational structure has created confusion for readers and is 
not compatible with the unique approach to identifying the FFRMS 
floodplain directed by E.O. 13690. The proposed rule therefore 
relocates the definition of best available information from within the 
definition of coastal high hazard area in 24 CFR 55.2 to two new 
sections, 24 CFR 55.7 and 55.8. It also adjusts the definitions of 
``0.2-percent-annual-chance (500-year) floodplain,'' ``floodway,'' and 
``1-percent-annual-chance (100-year) floodplain,'' to reflect the new 
citation.
    Sources of best available information for identifying the FFRMS 
floodplain would be described in 24 CFR 55.7 according to the CISA, 
0.2-Percent-Annual-Chance Flood, and FVA methods. Best available 
information sources for floodways, coastal high hazard areas, and areas 
within the Limit of Moderate Wave Action (LiMWA) would be identified in 
24 CFR 55.8 and include both effective and advisory or preliminary FEMA 
maps, similar to the current description of best available information 
within the coastal high hazard area definition.
    ``Critical action'' would be revised to include community 
stormwater management infrastructure and water treatment plants as 
examples of utilities or services that could become inoperative during 
flood and storm events.
    A definition of ``FFRMS floodplain'' would be added and the 
definition of 0.2-percent-annual-chance floodplain would be updated 
consistent with the FFRMS approach and to remove the statement that the 
0.2-percent-annual-chance floodplain is the minimum area of concern for 
critical actions, which may not be consistent with HUD's implementation 
of FFRMS when CISA analysis is available.
    A definition for ``impervious surface area'' would be added to 
provide an objective criterion for use in the proposed Sec. Sec.  
55.8(a)(1), 55.12, and 55.14.
    HUD also proposes to add a definition for the LiMWA based on FEMA 
criteria.\23\ The LiMWA is the inland limit of the area expected to 
receive 1.5-foot or greater breaking waves during a 1-percent-annual-
chance flood event. The area on the flood map between the coastal high 
hazard area (Zone V) and the LiMWA is called the Coastal A Zone, and 
laboratory tests have consistently confirmed that wave heights within 
the Coastal A Zone can cause significant damage to structures that are 
not constructed to withstand coastal hazards.\24\ Consistent with FEMA 
guidance, this proposed rule would require structures within the 
Coastal A Zone to be built to Zone V standards.
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    \23\ See: https://www.fema.gov/sites/default/files/documents/fema_using-limit-oderate-wave-action_fact-sheet_5-24-2021.pdf.
    \24\ See: Answers to Questions About the NFIP (page 46), 
available at https://agents.floodsmart.gov/sites/default/files/fema-answers-to-questions-about-the-NFIP.pdf.
---------------------------------------------------------------------------

    The definition for new construction would be removed and 
incorporated into a new Sec.  55.10, ``Limitations on HUD assistance in 
wetlands'' with additional context on construction actions.
    The definition for ``wetlands'' would be revised to clarify what is 
not included (certain ponds or deepwater aquatic habitats), and the 
part of the definition that describes how wetlands are determined would 
be removed from this section and moved to a new Sec.  55.9, 
``Identifying wetlands.''

C. Assignment of Responsibilities

    HUD proposes to clarify in 24 CFR 55.3 that HUD Assistant 
Secretaries, the General Counsel, and the President of the Government 
National Mortgage Association (GNMA) shall take full responsibility for 
all decisions made under their jurisdictions that are made pursuant to 
the decisionmaking process in 24 CFR 55.20. The duties of grantees and 
applicants would be revised for clarity, and a new Sec.  55.3(f) 
codifying the role of third-party providers would be added.

D. Notification of Floodplain Hazard

    This proposed rule would revise HUD's regulations requiring 
notification of floodplain hazard. It would move notification 
requirements from the current 24 CFR 55.21 and conveyance restrictions 
from the current 24 CFR 55.22 to a new 24 CFR 55.4 to emphasize the 
importance of providing notice as early in the process as possible. 
This section would retain the requirement that HUD (or HUD's designee) 
or the responsible entity must ensure that any party participating in a 
financial transaction for a property

[[Page 17761]]

located in a floodplain and any current or prospective tenant is 
notified of the hazards of the floodplain location. In addition, the 
new 24 CFR 55.4 would define notification requirements for property 
owners, buyers, developers, and renters and identify specific hazards 
and information that should be included in these notices based on the 
interests of these parties. Required information for owners, buyers, 
and developers would include the requirement or option to obtain flood 
insurance, the approximate elevation of the FFRMS floodplain, proximity 
of the site to flood-related infrastructure including dams and 
levees,\25\ ingress and egress or evacuation routes, disclosure of 
information on flood insurance claims filed on the property, and other 
relevant information such as available emergency notification 
resources. For HUD-assisted rental properties where flood insurance is 
required, new and renewal leases would be required to include 
acknowledgements signed by residents indicating that they have been 
advised that the property is in a floodplain and flood insurance is 
available for their personal property. Renters would also be informed 
of the location of ingress and egress or evacuation routes, available 
emergency notification resources, and emergency procedures for 
residents in the event of flooding. HUD encourages a proactive and 
systematic approach to notification requirements for floodplain risks 
to ensure that prospective buyers and renters are made aware of 
potential flood risk with sufficient warning so that they can make an 
informed decision considering their level of risk. The conveyance 
restrictions for the disposition of multifamily real property currently 
in 24 CFR 55.22 would be moved to a new 24 CFR 55.4 with minimal 
changes to reflect updated floodplain terminology.
---------------------------------------------------------------------------

    \25\ Proximity to flood control infrastructure can be identified 
through the U.S. Army Corps of Engineers' National Levee Database 
and National Inventory of Dams.
---------------------------------------------------------------------------

E. Flood Insurance

    In the current 24 CFR part 55 regulation, the National Flood 
Insurance Program (NFIP) is discussed primarily in the context of Flood 
Disaster Protection Act (FDPA) limitations on HUD program participation 
for properties in communities not participating in the NFIP or for 
previously Federally assisted properties where flood insurance is not 
maintained. Nevertheless, a much more frequently applicable FDPA 
requirement for HUD-assisted projects is that of the mandatory purchase 
of flood insurance within the Special Flood Hazard Area (SFHA) as 
designated by FEMA on the effective FIRM or FIS, and the NFIP plays an 
important role in minimization measures to reduce flood losses. To 
address these issues more comprehensively in the context of 24 CFR part 
55 decisionmaking, all applicable flood insurance requirements would be 
consolidated and moved to a new section 55.5.
    This section would also include new language clarifying that HUD or 
the responsible entity may require flood insurance beyond the minimums 
established in the FDPA or by a state, locality, Tribe, or this part 
when necessary to minimize financial risk. It also clarifies that 
mortgagees participating in a HUD assistance or mortgage insurance or 
guarantee program may impose additional flood insurance requirements. 
While nothing in this part requires flood insurance outside of the 
SFHA, HUD strongly encourages that flood insurance be obtained and 
maintained for all structures within the FFRMS floodplain to mitigate 
future financial losses. It may also be appropriate for high-value 
structures to maintain more flood insurance than is available under the 
NFIP: as of 2021, the maximum available building coverage through the 
NFIP is $250,000 for single-family structures of one-to-four units and 
$500,000 for multifamily structures with five or more housing units and 
commercial structures.\26\ For example, for FHA multifamily programs, 
the MAP Guide provides for flood insurance in an amount at least equal 
to the greater of the maximum flood insurance available for that type 
of property under the NFIP or an amount equal to the replacement cost 
of the bottom two stories above grade.\27\ For larger structures in 
more expensive areas, it may be necessary to obtain private flood 
insurance to insure up to the full replacement cost of the structure or 
risk catastrophic financial losses even with NFIP coverage.
---------------------------------------------------------------------------

    \26\ See: FEMA Flood Insurance and the NFIP Fact Sheet, released 
June 14, 2021. Available at https://www.fema.gov/fact-sheet/flood-insurance-and-nfip.
    \27\ See Sec. 3.9.2.3 of the MAP Guide, available at Available 
at: https://www.hud.gov/sites/dfiles/OCHCO/documents/4430GHSGG.pdf. 
See also Form HUD-92329, available at: https://www.hud.gov/sites/dfiles/OCHCO/documents/92329.pdf. Per the NFIP definition, the grade 
level is defined as the lowest or highest finished ground level that 
is immediately adjacent to the walls of the building. Use natural 
(pre-construction), ground level, if available, for Zone AO and Zone 
A (without BFE).
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F. Compliance

    This proposed rule would create a new section on complying with the 
floodplain management and protection of wetlands regulations in a new 
Sec.  55.6 that would outline the process HUD or the responsible entity 
must follow to determine whether compliance with these regulations is 
required, and whether the 8-step decisionmaking process is required, as 
well as whether the proposed action would require notification and 
flood insurance. This section would not create any new requirements, 
but it would provide a roadmap to complying with this part, to assist 
practitioners. It would also move a summary of documentation 
requirements from Sec.  55.27 to Sec.  55.6(d).
    This proposed rule would also create new sections on limitations on 
HUD assistance in floodplains and wetlands in Sec. Sec.  55.8 and 
55.10. These sections would largely maintain existing restrictions from 
the current part 55, with some revisions and additions. For example, 
proposed Sec.  55.8(b) would maintain the current requirement that all 
decisions be based on the latest available flood data provided by FEMA 
unless the current effective map indicates a higher flood risk than 
interim or preliminary sources.
    Proposed Sec.  55.8(c) would require that HUD or the responsible 
entity take measures to address repeat flood losses associated with 
structures identified by FEMA as Severe Repetitive Loss (SRL) 
properties,\28\ in order for HUD assistance to be used in the proposed 
activity. When FEMA has approved improvements designed to prevent 
preventrepeated flood losses at the SRL property and communicated these 
to the property owner, completion of this FEMA-identified mitigation 
qualifies the structure to be listed as ``Mitigated''

[[Page 17762]]

and may reduce the flood insurance premium of the SRL property. To 
ensure that the HUD substantial improvement, reconstruction, or new 
construction funding and HUD-required mitigation identified in the 8-
step process deliver this benefit, HUD or the responsible entity would 
need to address FEMA identified SRL mitigation within Step 5 
(minimization of impacts) of the 8-step process. The intent of this 
addition is to preserve lives and property, potentially reduce flood 
insurance costs, and ensure that HUD-identified mitigation aligns with 
that determined necessary by FEMA in order to avoid continued flood 
losses in properties that have experienced frequent flood losses.
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    \28\ SRL properties would be defined following current FEMA 
standards. In its April 2020 NFIP Flood Insurance Manual, FEMA 
designates NFIP-insured single-family or multifamily residential 
buildings as SRL where:
    1. The building has incurred flood-related damage for which four 
or more separate claims payments have been made, with the amount of 
each claim (including building and contents payments) exceeding 
$5,000, and with the cumulative amount of such claims payments 
exceeding $20,000; or
    2. At least two separate claims payments (building payments 
only) have been made under such coverage, with the cumulative amount 
of such claims exceeding the market value of the building.
    In both instances, at least two of the claims must be within 10 
years of each other, and claims made within 10 days of each other 
will be counted as one claim. In determining SRL status, FEMA 
considers the loss history since 1978, or from the building's 
construction if it was built after 1978, regardless of any changes 
in the ownership of the building. The term ``SRL property'' refers 
to either an SRL building or the contents within an SRL building, or 
both.
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G. Incidental Floodplain Exception

    For purposes of defining when projects may proceed with onsite 
floodways, this proposed rule would remove floodways (as well as 
coastal high hazard areas and the LiMWA) from the existing incidental 
floodplain exception (currently at Sec.  55.12(c)(7)) and replace it 
with a new Sec.  55.8(a)(1), which would cover limitations on HUD 
assistance in floodways. This section would clarify that HUD assistance 
could be used in floodways in two circumstances:
    1. Where an exception in Sec.  55.12 excepts all proposed 
activities from compliance with part 55. This is not a change from 
HUD's existing regulations.
    2. Where all structures and most improvements are removed from the 
floodway and a permanent covenant or comparable restriction would 
prevent future development or most new improvements in the floodway 
and/or wetland. This exception would combine aspects of the existing 
exceptions for floodplain restoration activities and incidental 
floodplains and would allow for limited improvements in the floodway, 
including functionally dependent uses, utility lines, de minimis 
improvements, and removal of existing structures or improvements.
    This option would allow for a broader range of activities in the 
floodway than is permitted under the current incidental floodplain 
exception. However, it would require projects with onsite floodways to 
complete the 8-Step decisionmaking process in Sec.  55.20 and determine 
that there are no practicable alternatives before approving any 
proposed activity that would modify or occupy the floodway.
    This proposed rule would maintain a narrower version of the 
existing incidental floodplain exception as applied to the FFRMS 
floodplain (not including floodways, coastal high hazard areas, or 
within the LiMWA) in proposed Sec.  55.12(g). This section would allow 
projects to proceed without completing the 8-Step decisionmaking 
process where an incidental portion of the project site includes the 
FFRMS floodplain.

H. Identifying Wetlands and Limitations on HUD Assistance in Wetlands

    This proposed rule would add new sections discussing wetlands 
identification and HUD's limitations on work impacting wetlands to 
address questions HUD has received over the years from practitioners. 
New Sec.  55.9, ``Identifying Wetlands,'' would build on the definition 
of ``wetland'' in Sec.  55.2(b)(11) to clarify common areas of 
confusion and remove unnecessary procedural requirements. This section 
would revise HUD's current regulations to address limitations 
associated with exclusive use of the National Wetlands Inventory (NWI) 
for wetlands screening.\29\ This rule would broaden the wetlands 
definition beyond NWI screening alone and would address the potential 
for data gaps or outdated information by requiring that HUD and 
responsible entities supplement the NWI with a visual observation of 
the property to assess wetlands indicators. Where these sources do not 
provide a conclusive answer, then practitioners may use one of three 
methods to determine the presence or absence of a wetland: (1) 
consultation with the U.S. Fish and Wildlife Service (FWS), which 
maintains the NWI, (2) reference to other Federal, state, and/or local 
resources and site analysis by the environmental review preparer, or 
(3) a wetlands evaluation prepared by a qualified wetlands scientist. 
This process would increase flexibility and avoid unnecessary 
consultation with FWS without increasing the risk that wetlands will 
not be accurately identified.\30\
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    \29\ https://www.fws.gov/program/national-wetlands-inventory.
    \30\ This proposed approach is specific to HUD's regulations and 
differs from the United States Army Corps of Engineers (USACE) 
process for jurisdictional wetland determination identified in the 
USACE Wetland Delineation Manual.
---------------------------------------------------------------------------

    Revised Sec.  55.10, ``Limitations of HUD Assistance in Wetlands,'' 
would explicitly define the procedural requirements for projects with 
the potential to directly or indirectly impact on- or off-site 
wetlands. The current part 55 is subject to interpretation on these 
requirements, and these revisions are intended to codify and clarify 
existing policies on wetlands compliance without imposing new 
requirements.

I. Clarification and Revisions of Exceptions

    This proposed rule would break down the exceptions in Sec.  
55.12(a)-(c) into three separate sections--Sec. Sec.  55.12, 55.13, and 
55.14--to improve overall clarity about the three distinct categories 
of excepted activities: those that are excluded from all compliance 
with part 55 (proposed Sec.  55.12), those that must comply with the 
standards and limitations in part 55 such as prohibitions on activities 
in floodways but are not required to complete the 8-step process 
(proposed Sec.  55.13), and those that may complete the modified 5-step 
decisionmaking process in lieu of the full 8-step process (proposed 
Sec.  55.14). Beyond this reorganization, the proposed rule would make 
limited changes to the exceptions themselves.
1. Exceptions in Proposed Sec.  55.12
    Based on HUD experience and activities reflected in environmental 
review records for floodplain restoration projects, this proposed rule 
would seek to provide flexibility for floodplain-compatible parks and 
recreation uses routinely combined with floodplain and wetland 
restoration and preservation work. In a revised 24 CFR 55.12, 
``Inapplicability of 24 CFR part 55 to certain categories of proposed 
actions,'' this proposed rule would expand on the existing exception 
for floodplain and wetland restoration and preservation activities to 
allow certain structures and improvements designed to be compatible 
with the beneficial floodplain or wetland function of a property.
    Two exceptions would be removed under this proposed rule. The 
exception for sites where FEMA has issued a Letter of Map Amendment 
(LOMA) or Letter of Map Revision (LOMR) in the current Sec.  
55.12(c)(8) would be removed. HUD proposes to remove Sec.  
55.12(c)(8)(i) because a FEMA determination, through the LOMA/LOMR 
process, that a location is outside of the 1-percent-annual-chance 
floodplain or above base flood elevation is not intended to state 
whether the location is or is not within the FFRMS floodplain. HUD 
proposes to remove Sec.  55.12(c)(8)(ii) on conditional LOMAs and 
conditional LOMRs, because this exception can incentivize adding fill 
in a floodplain in a manner that reduces floodplain function in 
adjoining areas by excepting such actions from compliance with part 55. 
HUD proposes to change that policy to disincentivize the use of 
sitewide fill and require completion of the 8-step process before 
adding fill to modify a floodplain. HUD also proposes to

[[Page 17763]]

remove Sec.  55.12(c)(11) for projects related to ships and waterborne 
vessels because these are not activities that generally receive HUD 
funds, and practitioners have expressed confusion over its presence in 
the rule.
2. Exceptions in Proposed Sec. Sec.  55.13 and 55.14
    The proposed rule would make minimal changes to the activities 
currently listed in Sec. Sec.  55.12(a) and (b), which must comply with 
the requirements in part 55 but which do not trigger the full 8-step 
process. Notably, it would add three new exceptions:
    1. Proposed Sec.  55.13(f), for special projects dedicated entirely 
to improving energy efficiency or installing renewable energy that do 
not meet the threshold for substantial improvement, would limit 
procedural hurdles to energy retrofit projects, which have limited 
potential to adversely affect floodplains or wetlands.
    2. Proposed Sec.  55.13(g) would provide an exception for the 
guarantee of Single-family mortgages under the Direct Guarantee 
procedure for the Section 184 Indian Housing loan guarantee program or 
the Section 184A Native Hawaiian Housing loan guarantee program.
    3. Proposed Sec.  55.14(e), for repairs, rehabilitation, or 
replacement of certain infrastructure with limited impact on impervious 
surface area, including streets, curbs, and gutters, would provide an 
exception for smaller scale infrastructure projects that is lacking 
from the current rule. This provision does not apply to critical 
actions, levee systems, chemical storage facilities (including any 
tanks), wastewater facilities, or sewer lagoons, all of which would 
require the 8-step process.
    The proposed rule would also clarify the requirement currently 
listed in Sec.  55.12(a)(3) and (4) that the footprint of the structure 
and paved areas is not significantly increased. Proposed Sec.  55.14(c) 
and (d) would require that the footprint of the structure and paved 
areas is not increased by more than 20 percent.

J. 8-Step Decisionmaking Process

    For actions that trigger the 8-step decisionmaking process in whole 
or in part, HUD is proposing a number of revisions to Sec.  55.20 to 
implement FFRMS, clarify proper completion of each of the 8 steps, and 
otherwise modernize requirements. These revisions include:
    1. Codifying roles and responsibilities in the 8-step process, 
which have been frequently misunderstood.
    2. Editing for consistency with FFRMS and new sections on 
identification and limitations associated with the FFRMS floodplain and 
wetlands.
    3. Adding an option to publish public notices in Steps 2 and 7 on 
an appropriate government website as an alternative to a printed news 
medium.
    4. Inserting further clarifications and examples of required and 
suggested analysis.
    5. Adding a requirement to coordinate the 8-step process with any 
public engagement process associated with environmental justice, where 
project planners are also engaging stakeholders in compliance with E.O. 
12898, ``Federal Actions to Address Environmental Justice in Minority 
Populations and Low-Income Populations.'' HUD intends to issue updated 
guidance on complying with E.O. 12898 prior to this proposed rule going 
into effect.

K. Elevation, Floodproofing, Minimization and Restoration

    In addition to the revisions to Sec.  55.20 described above, HUD 
would significantly expand step 5 in Sec.  55.20(e) to implement FFRMS. 
Section 55.20(e) of the proposed rule would provide that, in addition 
to the current mitigation and risk reduction requirements, all new 
construction and substantial improvement actions in the FFRMS 
floodplain subject to the 8-step process must be elevated or, in 
certain cases, floodproofed above the FFRMS floodplain. If higher 
elevations, setbacks, or other floodplain management measures are 
required by State, Tribal, or locally adopted code or standards, HUD 
would require that those higher standards apply. The revised section 
would also provide more specific guidance on minimization and 
floodplain restoration measures, which are a key component of 
increasing flood resilience and must be considered in the 8-step 
process.
    For non-critical actions that are non-residential structures or 
multifamily residential structures that have no residential dwelling 
units below the FFRMS floodplain, HUD is proposing in Sec.  
55.20(e)(1)(ii) that projects may, as an alternative to being elevated 
above the FFRMS floodplain, be designed and constructed such that, 
below the FFRMS floodplain, the structure is floodproofed. HUD would, 
except for changing ``base flood level'' to ``FFRMS floodplain,'' as 
defined in Sec.  55.7, adopt FEMA's requirements for floodproofing as 
provided in FEMA's regulations at 44 CFR 60.3(c)(3)(ii) and 
60.3(c)(4)(i). In summary, all new construction or substantial 
rehabilitation of non-residential and certain mixed-use structures 
within the FFRMS floodplain that are not elevated must be floodproofed 
consistent with the latest FEMA standards at or above the level of the 
FFRMS floodplain. This provision would permit owners of non-residential 
and certain mixed-use buildings to construct structures in a way that 
is less expensive than elevating but allows the buildings to withstand 
flooding, thus appropriately balancing property protection with costs 
and reflecting the lower risk to human life and safety in non-
residential structures or parts of structures.
    In the case of residential buildings, in Sec.  55.20(e)(1), HUD 
would provide that the term ``lowest floor'' must be applied consistent 
with FEMA regulations in 44 CFR 59.1, FEMA's Elevation Certificate 
guidance, or FEMA's current guidance that establishes lowest floor. 
Proposed Sec.  55.20(e)(2) identifies specific strategies that can 
reduce flood risk and loss of beneficial values of floodplains and 
wetlands, including green infrastructure, reconfiguration of the 
project footprint, and incorporation of resilient buildings standards. 
These strategies are based on floodplain and stormwater management best 
practices and HUD experience. Based on requests for technical 
assistance in this area, HUD believes the inclusion of recommended 
minimization measures will assist 8-step process decisionmakers.
    The proposed rule would also add Sec.  55.20(e)(3) to more clearly 
describe what is meant by restoration and preservation of wetlands or 
beneficial functions of the floodplain. Floodplain preservation is a 
concept that has been used in 24 CFR part 55 implementation 
historically but has been defined primarily through guidance, and this 
clarification is based on past practice and the successful 
incorporation of these measures in HUD-assisted projects.
    Finally, the proposed rule would replace Sec.  55.20(e)(3), which 
defines mitigation measures specific to critical actions, with proposed 
Sec.  55.20(e)(4). This section would establish mandatory actions to 
plan ahead for residents' safety in multifamily residential properties 
as well as critical actions.

L. Processing for Existing Nonconforming Sites

    This draft proposes a new Sec.  55.21, ``Alternate processing for 
existing nonconforming sites,'' to address concerns about existing 
sites with onsite floodways. This section would create a special 
approval process for

[[Page 17764]]

improvements to existing HUD-assisted or HUD-insured properties with 
onsite floodways under the following circumstances:
    1. HUD completes an 8-step process and environmental review 
pursuant to part 50 and mandates measures to reduce flood risk and 
ensure that there are no other environmental risks or hazards at the 
site,
    2. Concrete measures will be taken to reduce flood risk and improve 
overall resilience at the site, including removing all residential 
units from the floodway, and
    3. HUD determines that the HUD assistance cannot be practicably 
transferred to a safer site.
    The purpose of this section is to establish a means of continuing 
HUD assistance or financing in exceptional circumstances to existing 
HUD-assisted or HUD-financed projects (e.g., properties receiving 
assistance through Public Housing or Section 8 Project-based Rental 
Assistance or subject to a HUD-insured mortgage) that would otherwise 
be unable to comply with part 55 due to the presence of an on-site 
floodway. This section should be applied only in very rare cases and is 
not intended to eliminate the general prohibition on providing HUD 
assistance for projects within floodways. However, HUD recognizes that 
there are circumstances in which terminating HUD assistance would not 
improve residents' overall resilience or safety in the context of HUD's 
mission. In such cases, HUD will take a close look at the site and 
determine whether the best option to improve flood resilience would be 
financing improvements at the existing site or rejecting HUD assistance 
at the site. The Assistant Secretary for Community Planning and 
Development would have the authority to approve a project after HUD has 
met all of the conditions above.

M. Other Changes to Part 55

    This proposed rule would make various other changes to part 55 to 
update terminology and references and would restructure part 55 for 
readability and accuracy. Additionally, this proposed rule would remove 
various provisions codified in part 55 that are outdated or 
underutilized.
    HUD proposes removing Sec.  55.24, ``Aggregation,'' as this 
provision is redundant with aggregation principles described more 
clearly in 24 CFR parts 50 and 58, which also apply to all projects 
processed under 24 CFR part 55.
    The proposed rule would also remove current Sec.  55.25, ``Areawide 
compliance.'' Areawide decisionmaking described in this section 
requires a complex notification process involving publications, and HUD 
has no record of the provision's use in a HUD-assisted activity since 
the inception of 24 CFR part 55. This provision is unnecessary, as HUD 
has well-established procedures for tiering of environmental review 
records that similarly facilitate compliance with part 55 across a 
geographic area without relying on Sec.  55.25.
    Instructions on documenting 24 CFR part 55 decisionmaking in the 
HUD environmental review record would be relocated from the end of the 
regulation in Sec.  55.27 to Sec.  55.6, where they would appear in 
context with general instructions on compliance with 24 CFR part 55 and 
a description of its structure. Additionally, HUD would revise the 
description of documentation requirements for consideration of 
alternatives to the proposed action to remove the requirement to 
compile a list of alternative properties in the local market, as this 
information may be unavailable for some project types or not relevant 
to consideration of viable alternatives to achieve the goals of the 
decisionmaking process within a given HUD program context.
    HUD is proposing to remove Sec.  55.28, which in concept provides 
relief from five of the eight steps in the wetlands decisionmaking 
process when a permit has been secured from the United States Army 
Corps of Engineers (USACE) under Section 404 of the Clean Water Act for 
a proposed HUD-assisted construction activity in a jurisdictional 
wetland outside of the floodplain. HUD proposes to remove this section 
because practitioners have not historically found it useful, and part 
55 already contains another section that would offer similar relief 
from the 8-step process where USACE (or any other agency) has already 
completed the 8-step process. Section 55.26, which would be retained 
with revisions in the proposed rule, allows HUD or responsible entities 
to adopt another agency or responsible entity's eight-step process 
under conditions that are less restrictive than those in Sec.  55.28, 
and would apply to decisionmaking under E.O. 11988 or 11990 carried out 
by USACE.

N. Minimum Property Standards

    This rule also proposes to apply a new elevation standard to one-
to-four-family residential structures with mortgages insured by the 
FHA. Generally, in HUD's single-family mortgage insurance programs, 
Direct Endorsement mortgagees submit applications for mortgage 
insurance to HUD, and Lender Insurance mortgagees endorse loans for 
insurance, after the structure has been built. Thus, there is no HUD 
review or approval before the completion of construction. In these 
instances, HUD is not undertaking, financing, or assisting construction 
or improvements. Thus, the FHA single family mortgage insurance program 
is not subject to review under E.O. 11988, NEPA (42 U.S.C. 4321 et 
seq.), or related environmental laws or authorities. However, newly 
constructed single-family properties in HUD's mortgage insurance 
programs are generally required to meet HUD's Minimum Property 
Standards under 24 CFR 200.926 through 200.926e. These property 
standards require that when HUD insures a mortgage on a property, the 
property meets basic livability and safety standards and is code 
compliant. The section relating to construction in flood hazard areas, 
Sec.  200.926d(c)(4), has long been included as a property standard.
    In alignment with the proposals in this rulemaking that address 
FFRMS under E.O. 11988, HUD is also proposing to amend its Minimum 
Property Standards on site design, and specifically the standards 
addressing drainage and flood hazard exposure at Sec.  200.926d(c)(4). 
The purpose of the amendment of the property standard is to decrease 
potential damage from floods, increase the safety and soundness of the 
property for residents, and provide for more resilient communities in 
flood hazard areas. HUD would revise the section by requiring the 
lowest floor (including basements and other permanent enclosures) of 
newly constructed and substantially improved structures, within the 1-
percent-annual-chance floodplain, to be at least 2 feet above the base 
flood elevation as determined by best available information. For one- 
to four-unit housing under HUD mortgage insurance and low-rent public 
housing programs, HUD's Minimum Property Standards in 24 CFR part 200 
currently require that a one- to four-unit property involving new 
construction, located in the 1 percent-annual-chance floodplain in the 
effective FIRM, be elevated to the effective FIRM base flood elevation. 
This proposed rule would add two feet of additional elevation to the 
base flood elevation as a resilience standard and would apply this 
standard to substantial improvement as well as new construction of such 
properties. This rule would not require consideration of the 
horizontally expanded FFRMS floodplain for single-family mortgage 
insurance projects governed by the

[[Page 17765]]

requirements in the Minimum Property Standards.

O. Categorical Exclusion

    HUD also proposes to amend Sec.  50.20(a)(2)(i) to revise the 
categorical exclusion from further environmental review under NEPA for 
minor rehabilitation of one- to four-unit residential properties. 
Specifically, HUD would remove the qualification that the footprint of 
the structure may not be increased in a floodplain or wetland when HUD 
performs the review. In 2013, HUD removed the footprint trigger from 
the corresponding categorical exclusion at Sec.  58.35(a)(3)(i) for 
rehabilitations reviewed by responsible entities. This change will make 
the review standard the same regardless of whether HUD or a responsible 
entity is performing the review. Moreover, when HUD performs a review 
under 24 CFR part 50, the categorical exclusion in Sec.  50.20(a)(3) 
applies to construction, but not rehabilitation, of up to four units in 
a floodplain or wetland as an individual action such that an 
environmental assessment or environmental impact statement is normally 
not required. Rehabilitated structures in a floodplain or wetland with 
an increased footprint currently require an environmental assessment or 
environmental impact statement. See Sec.  50.20(a)(3)(iii). It is 
logically inconsistent to require a greater review for minor 
rehabilitations than new construction. Similarly, it is logically 
inconsistent to apply a higher level of review for HUD as opposed to 
grantees because the proposed actions would be the same regardless of 
review authority under 24 CFR part 50 or Part 58.
    Actions under this proposed categorical exclusion would remain 
subject to E.O. 11988, E.O. 11990, and Part 55, and any impact 
resulting from an increased footprint in a floodplain or wetland would 
be fully addressed by the 8-step decisionmaking process in Part 55.

P. Permitting Online Posting

    Finally, this proposed rule would update Sec. Sec.  50.23, 58.43, 
58.45, and 58.59 to allow public notices to be posted on an appropriate 
government website as an alternative to publication in local news media 
if the website is accessible to individuals with disabilities and 
provides meaningful access to individuals with Limited English 
Proficiency. This change would make parts 50 and 58 consistent with 
part 55, which would revise Sec.  55.20 to allow public notices 
required as part of the 8-step process to be posted on a government 
website instead of a newspaper.

Q. Specific Questions for Comment

    1. HUD invites comments on alternative approaches to define the 
FFRMS floodplain. Specifically, HUD seeks comments on whether to 
prioritize an alternative method among the three approaches to define 
the FFRMS floodplain, such as FVA as contemplated in the 2016 proposed 
rule, rather than CISA as discussed in this proposed rule.
    2. HUD also invites comments on whether HUD should rely on the 
following alternative approach that HUD considered when developing this 
proposed rule: where CISA resources are not available, but the 0.2-
percent-annual-chance floodplain has been mapped, the FFRMS floodplain 
for non-critical actions would be defined as either the 0.2-percent-
annual-chance floodplain or the base flood elevation plus two feet of 
freeboard, whichever is lower. This alternative approach would reduce 
costs in the short term and the potential for overbuilding, but may 
result in higher flood risk and costs in the long term than the 
proposed approach of selecting the higher standard for non-critical 
actions.
    3. HUD also invites comments on whether and under what 
circumstances it should rely on the FFRMS floodplain as defined by 
another Federal agency where that agency has already identified the 
FFRMS floodplain using the approach defined in their policies for a 
particular project. HUD requests comments on whether Part 55 should 
permit HUD or the responsible entity to rely on the FFRMS floodplain as 
defined by another Federal agency and, if so, under what circumstances 
this would be appropriate.
    4. Additionally, HUD seeks comment on what factors or stakeholder 
needs HUD should consider when establishing an effective date for this 
rule and whether HUD should establish an extended effective date.
    5. There may be instances in which the FVA elevation is more 
protective than the 0.2-percent-annual-chance elevation due to wave 
action in coastal areas. HUD invites comment on including the following 
exception for coastal areas where the 0.2-percent-annual-chance 
floodplain is used to define FFRMS due to the absence of CISA maps and 
analysis: where FVA is more protective than the 0.2-percent-annual-
chance elevation due to wave action, HUD would require use of FVA to 
define the FFRMS and elevation requirements.
    6. HUD recognizes the critical importance of this rule on the long-
term viability of HUD's assisted and insured housing, but invites 
public comment on alternative measures that may help to promote the 
production and availability of affordable housing in the near-term 
while still promoting flood resilience.
    7. In 2016, HUD proposed elevation standards for the FHA single 
family Minimum Property Standards (MPS) identical to those in this 
proposed rule. HUD invites comment as to whether the elevation standard 
should remain as proposed in this rule for FHA single family 
properties.
    8. Finally, HUD invites comment on whether provisions of the 
proposed rule will redress, perpetuate, or create any disproportionate 
adverse impact against any group based on race, national origin, color, 
religion, sex, familial status, or disability as well as comments on 
how HUD can further incorporate equity considerations into this 
proposed rule to help HUD meet its affordable housing and community 
development mission.

R. Tribal Consultation

    HUD's Government-to-Government Tribal Consultation Policy calls for 
consultation with Tribal Nations and Tribal Leaders early in the 
rulemaking process on matters that have Tribal implications. 
Accordingly, on June 10, 2021, HUD sent letters to all eligible funding 
recipients under NAHASDA and their tribally designated housing entities 
informing them of the nature of the forthcoming rule and soliciting 
comments. This letter announced a 30-day comment period and a webinar 
and conference call consultation session. On August 18, 2021, HUD sent 
a second letter with a 60-day comment period to review an early draft 
of the regulatory changes. During this period, HUD held an additional 
consultation session via webinar and conference call. This letter was 
posted on Codetalk, the HUD Office of Native American Programs' 
website, along with an early outline of the rule. During this draft 
review period, HUD received one written comment, suggesting that HUD 
explicitly recognize the right to Tribal self-governance in Part 55. 
HUD acknowledges the sovereignty of federally recognized American 
Indian and Alaska Native tribes and is committed to operate within a 
government-to-government relationship to allow tribes the maximum 
amount of responsibility for administering their housing programs. 
Tribes have the opportunity to comment on this proposed rule, and HUD 
welcomes further comment.

[[Page 17766]]

IV. Findings and Certifications

Regulatory Review--E.O. 12866 and E.O. 13563

    Under E.O. 12866 (Regulatory Planning and Review), a determination 
must be made whether a regulatory action is significant and, therefore, 
subject to review by the Office of Management and Budget (OMB) in 
accordance with the requirements of the order. Executive Order 13563 
(Improving Regulations and Regulatory Review) directs executive 
agencies to analyze regulations that are ``outmoded, ineffective, 
insufficient, or excessively burdensome, and to modify, streamline, 
expand, or repeal them in accordance with what has been learned.'' 
Executive Order 13563 also directs that, where relevant, feasible, and 
consistent with regulatory objectives, and to the extent permitted by 
law, agencies are to identify and consider regulatory approaches that 
reduce burdens and maintain flexibility and freedom of choice for the 
public. This rule was determined to be a ``significant regulatory 
action'' as defined in section 3(f) of E.O. 12866 (although not an 
economically significant regulatory action, as provided under section 
3(f)(1) of the Executive Order).
    As discussed in this preamble, the proposed regulatory amendments 
would, based on E.O. 13690 and the Guidelines, require, as part of the 
decisionmaking process established to ensure compliance with E.O. 11988 
(Floodplain Management), that new construction or substantial 
improvement in a floodplain be elevated above the FFRMS floodplain or 
floodproofed. These amendments would also provide a process for 
determining the FFRMS Floodplain that would establish a preference for 
the climate-informed science approach (CISA). It would also revise HUD 
regulations in various other ways, including permitting HUD assistance 
to be used for a broader range of reasonable activities in floodways, 
and would allow improvements beyond maintenance at sites with onsite 
floodplains in exceptional circumstances, after completion of the 8-
step process. This proposed rule would also revise HUD's Minimum 
Property Standards for one-to-four-unit housing to require that the 
lowest floor in newly constructed and substantially improved structures 
located within the 1-percent-annual-chance floodplain be built at least 
2 feet above the base flood elevation. This rule also proposes to 
revise a categorical exclusion available when HUD performs the 
environmental review by making it consistent with changes to a similar 
categorical exclusion that is available to HUD grantees or other 
responsible entities when they perform the environmental review. Other 
changes would clarify, streamline, and update HUD's regulations.
    The rule is part of HUD's commitment under HUD's Climate Action 
Plan. Building to the standards discussed in this proposed rule would 
increase resiliency, reduce the risk of flood loss, minimize the impact 
of floods on human safety, health, and welfare, and promote sound, 
sustainable, long-term planning informed by a more accurate evaluation 
of risk that takes into account possible sea level rise and increased 
development associated with population growth.

Regulatory Impact Analysis

    Elevating HUD-assisted structures located in and around the FFRMS 
floodplain will lessen damage caused by flooding and avoid relocation 
costs to tenants associated with temporary moves when HUD-assisted 
structures sustain flood damage and are temporarily uninhabitable. 
These benefits, which are realized throughout the life of HUD-assisted 
structures, are offset by the one-time increase in construction costs, 
borne only at the time of construction.
    In addition, the likelihood that floods in coastal areas will 
become more frequent and damaging due to rising sea levels in future 
decades necessitates a stricter standard than the one currently in 
place. According to NOAA, sea level along the contiguous U.S. coastline 
is expected to rise, on average, 10 to 12 inches (0.25 to 0.30 meters) 
over the next 30 years (2020 to 2050).\31\ The Intergovernmental Panel 
on Climate Change (2019) also confirms that the sea level will continue 
rising throughout the 21st century.\32\
---------------------------------------------------------------------------

    \31\ Sweet, W.V., B.D. Hamlington, R.E. Kopp, C.P. Weaver, P.L. 
Barnard, D. Bekaert, W. Brooks, M. Craghan, G. Dusek, T. Frederikse, 
G. Garner, A.S. Genz, J.P. Krasting, E. Larour, D. Marcy, J.J. 
Marra, J. Obeysekera, M. Osler, M. Pendleton, D. Roman, L. Schmied, 
W. Veatch, K.D. White, and C. Zuzak, 2022: Global and Regional Sea 
Level Rise Scenarios for the United States: Updated Mean Projections 
and Extreme Water Level Probabilities Along U.S. Coastlines. NOAA 
Technical Report NOS 01. National Oceanic and Atmospheric 
Administration, National Ocean Service, Silver Spring, MD, 111 pp. 
https://oceanservice.noaa.gov/hazards/sealevelrise/sealevelrise-tech-report.html.
    \32\ IPCC, 2019: Summary for Policymakers. In: IPCC Special 
Report on the Ocean and Cryosphere in a Changing Climate [H.-O. 
P[ouml]rtner, DC Roberts, V. Masson-Delmotte, P. Zhai, M. Tignor, E. 
Poloczanska, K. Mintenbeck, A. Alegr[iacute]a, M. Nicolai, A. Okem, 
J. Petzold, B. Rama, N.M. Weyer (eds.)]. In press.
---------------------------------------------------------------------------

    As discussed in the regulatory impact analysis (RIA) that 
accompanies this rule, HUD estimates that requiring developers to 
construct or floodproof HUD-funded or insured properties to two feet 
above base flood elevation for single-family homes and above the CISA 
floodplain for multifamily properties will increase construction costs 
by $5.157 million to $107.294 million per annual cohort. These are one-
time costs which occur at the time of construction. Benefits of the 
increased standard include avoided damage to buildings, as measured by 
decreased insurance premiums, and avoided costs associated with 
homeowners and tenants being displaced. These benefits occur annually 
over the life of the structures. Over a 40-year period, HUD estimates 
the NPV of aggregate benefits will total $64.908 million to $356.584 
million.
    These estimates are based on the annual production and 
rehabilitation of HUD-assisted and insured structures in the floodplain 
and accounts for the 40 states (in addition to the District of Columbia 
and Puerto Rico) with existing freeboard requirements. The cost of 
compliance and expected benefits are lower in these states than in 
states that have no minimum elevation requirements above base flood 
elevation. HUD's analysis does not consider benefits due to further 
coastal sea level or riverine rise. Further increases in sea level rise 
or inland and riverine flooding would increase the benefits of this 
rule. For a complete description of HUD's analysis, please see the 
accompanying RIA for this rule on regulations.gov.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule would not have 
a significant economic impact on a substantial number of small 
entities.
    With respect to all entities, including small entities, it is 
unlikely that the economic impact would be significant. As the RIA 
explains, the benefits of reduced damage offset the construction costs. 
Further, small entities may benefit more since they are less likely to 
be able to endure financial hardships caused by severe flooding.
    Based on an engineering study conducted for FEMA,\33\ the 
construction cost of increasing the elevation of the base of a new 
residential structure two

[[Page 17767]]

additional feet of vertical elevation varies from 0.3 percent to 4.8 
percent of the base building cost. This results in an increase of up to 
$7,834 per single family home and $4,772 per unit in a multi-family 
property located in states with no existing freeboard requirements. 
Consequently, this would not pose a significant burden to small 
entities in the single family housing development industry.
---------------------------------------------------------------------------

    \33\ See Federal Emergency Management Agency. 2013. ``2008 
Supplement to the 2006 Evaluation of the National Flood Insurance 
Program's Building Standards''.
---------------------------------------------------------------------------

    These costs are likely higher than would actually be caused by the 
increased standard because most HUD-assisted or insured substantial 
improvement projects already involve elevation to comply with the 
current standard, elevation to the base flood elevation (base flood 
elevation+0). Thus, elevating a structure an additional two feet would 
be marginal compared to the initial cost of elevation to the floodplain 
level.
    For this reason, the undersigned certifies that there is no 
significant economic impact on small entities. Notwithstanding HUD's 
determination that this rule will not have a significant economic 
impact on a substantial number of small entities, HUD specifically 
invites comments regarding any less burdensome alternatives to this 
rule that would meet HUD's program responsibilities.

Environmental Impact

    A Finding of No Significant Impact (FONSI) with respect to 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of NEPA (42 U.S.C. 
4332(2)(C)). The Finding of No Significant Impact will be available for 
review in the docket for this rule on Regulations.gov.

Federalism Impact

    E.O. 13132 (entitled ``Federalism'') prohibits an agency from 
publishing any rule that has federalism implications if the rule either 
imposes substantial direct compliance costs on state and local 
governments and is not required by statute, or preempts state law, 
unless the agency meets the consultation and funding requirements of 
section 6 of the Order. This rule does not have federalism implications 
and would not impose substantial direct compliance costs on state and 
local governments nor preempts state law within the meaning of the 
Order.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 
1531-1538) (UMRA) establishes requirements for Federal agencies to 
assess the effects of their regulatory actions on state, local, and 
tribal governments, and on the private sector. This rule does not 
impose any Federal mandates on any state, local, or tribal governments, 
or on the private sector, within the meaning of UMRA.

Paperwork Reduction Act

    The information collection requirements contained in this rule were 
reviewed by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 
3501-3520) and assigned OMB Control Number 2506-0151. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information, unless the collection displays a valid 
control number.

List of Subjects

24 CFR Part 50

    Environmental impact statements.

24 CFR Part 55

    Environmental impact statements, Floodplains, Wetlands.

24 CFR Part 58

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

24 CFR Part 200

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

    Accordingly, for the reasons stated in the preamble above, HUD 
proposes to amend 24 CFR parts 50, 55, 58, and 200 as follows:

PART 50--PROTECTION AND ENHANCEMENT OF ENVIRONMENTAL QUALITY

0
1. The authority citation for part 50 continues to read as follows:

    Authority: 42 U.S.C. 3535(d) and 4321-4335; and Executive Order 
11991, 3 CFR, 1977 Comp., p. 123.


Sec.  50.4  [Amended]

0
2. Amend Sec.  50.4(b)(2) by removing ``(3 CFR, 1977 Comp., p. 117)'' 
and replacing it with ``as amended by Executive Order 13690, February 
4, 2015 (80 FR 6425), (3 CFR, 2015 Comp., p. 6425).''
0
3. Revise Sec.  50.20(a)(2)(i) to read as follows:


Sec.  50.20  Categorical exclusions subject to the Federal laws and 
authorities cited in Sec.  50.4.

    (a) * * *
    (2) * * *
    (i) In the case of a building for residential use (with one to four 
units), the density is not increased beyond four units, and the land 
use is not changed;
* * * * *


Sec.  50.23  [Amended].

0
4. In Sec.  50.23(c), remove the comma after ``printed news medium,'' 
then add ``or on an appropriate government website that is accessible 
to individuals with disabilities and provides meaningful access for 
individuals with Limited English Proficiency'' after ``printed news 
medium''.

PART 55--FLOODPLAIN MANAGEMENT AND PROTECTION OF WETLANDS

0
5. The authority citation for part 55 is revised to read as follows:

    Authority:  42 U.S.C. 3535(d), 4001-4128 and 5154a; E.O. 13690, 
80 FR 6425, E.O. 11988, FR 26951, 3 CFR, 1977 Comp., p. 117; E.O. 
11990, 42 FR 26961, 3 CFR, 1977 Comp., p 121.

0
6. Amend Sec.  55.1 as follows:
0
a. Revise the section heading;
0
b. In paragraph (a)(1), add ``, as amended,'' after Floodplain 
Management'';
0
c. Revise paragraph (a)(3);
0
d. Remove paragraphs (a)(4) and (a)(5);
0
e. Remove and reserve paragraph (b); and
0
f. Remove paragraph (c).
    The revisions and additions read as follows:


Sec.  55.1  Purpose.

    (a) * * *
    (3) This part implements the requirements of Executive Order 11988, 
Floodplain Management, as amended, and Executive Order 11990, 
Protection of Wetlands, and employs the principles of the Unified 
National Program for Floodplain Management. These regulations apply to 
all proposed actions for which approval is required, either from HUD 
(under any applicable HUD program) or from a recipient (under programs 
subject to 24 CFR part 58), that are subject to potential harm by 
location in floodplains or wetlands. Covered actions include 
acquisition, construction, demolition, improvement, disposition, 
financing, and use of properties located in floodplains or wetlands.

[[Page 17768]]

    (b) [Reserved].
0
7. Amend Sec.  55.2 as follows:
    a. In paragraph (a), remove ``Floodplain Management Guidelines for 
Implementing Executive Order 11988 (43 FR 6030, February 10, 1978)'' 
and add in its place ``Guidelines for Implementing Executive Order 
11988, Floodplain Management, and Executive Order 13690, Establishing a 
Federal Flood Risk Management Standard and a Process for Further 
Soliciting and Considering Stakeholder Input (80 FR 64008, October 22, 
2015) (Water Resources Council Interagency Guidelines)'';
0
b. Revise paragraphs (b)(1) and (b)(3)(i)(B);
0
c. Remove and reserve paragraph (b)(3)(ii);
0
d. Redesignate paragraphs (b)(4) to (b)(7) as paragraphs (b)(5) to 
(b)(8), respectively, add new paragraph (b)(4); revise redesignated 
paragraph (b)(5); redesignate paragraphs (b)(9) to (b)(11) as 
paragraphs (b)(11) to (b)(13), add new paragraphs (b)(9) and (b)(10) 
and revise redesignated paragraphs (b)(11) and (b)(13); and
0
e. Remove ``Sec.  55.2(b)(1)'' from newly redesignated paragraph (b)(6) 
and add in its place ``Sec.  55.8(b)''.
    The revisions and additions read as follows:


Sec.  55.2  Terminology.

* * * * *
    (b) * * *
    (1) Coastal high hazard area means the area subject to high 
velocity waters, including but not limited to hurricane wave wash or 
tsunamis. The area is designated on a Flood Insurance Rate Map (FIRM) 
or Flood Insurance Study (FIS) under FEMA regulations, or according to 
best available information. (See, Sec.  55.8(b) for appropriate data 
sources.)
* * * * *
    (3) * * *
    (i) * * *
    (B) Provide essential and irreplaceable records or utility or 
emergency services that may become lost or inoperative during flood and 
storm events (e.g., community stormwater management infrastructure, 
water treatment plants, data storage centers, generating plants, 
principal utility lines, emergency operations centers including fire 
and police stations, and roadways providing sole egress from flood-
prone areas); or
* * * * *
    (ii) [Reserved]
    (4) Federal Flood Risk Management Standard (FFRMS) floodplain means 
the floodplain as defined by Executive Order 13690 and Water Resources 
Council Interagency Guidelines and further described as applied to HUD-
assisted activities by Sec.  55.7 of this part.
    (5) 0.2-percent-annual-chance (500-year) floodplain means the area, 
including the base flood elevation, subject to inundation from a flood 
having a 0.2 percent chance or greater of being equaled or exceeded in 
any given year. (See Sec.  55.8(b) for appropriate data sources).
* * * * *
    (9) Impervious surface area means an improved surface that 
measurably reduces the rate of water infiltration below the rate that 
would otherwise be provided by the soil present in a location prior to 
improvement, based on the soil type identified either by the Natural 
Resource Conservation Service Soil Survey or geotechnical study. 
Impervious surfaces include, but are not limited to, unperforated 
concrete or asphalt ground cover, unvegetated roofing materials, and 
other similar treatments that impede infiltration.
    (10) Limit of Moderate Wave Action (LiMWA) means the inland limit 
of the portion of coastal Zone AE where wave heights can be between 1.5 
and 3 feet during a base flood event, subjecting properties to damage 
from waves and storm surge. (See, Sec.  55.8(b) for appropriate data 
sources).
    (11) 1-percent-annual-chance (100-year) floodplain means the area 
subject to inundation from a flood having a one percent or greater 
chance of being equaled or exceeded in any given year. (See Sec.  
55.8(b) for appropriate data sources).
* * * * *
    (13) Wetlands means those areas that are inundated or saturated by 
surface or ground water with a frequency sufficient to support, and 
under normal circumstances does or would support, a prevalence of 
vegetative or aquatic life that requires saturated or seasonally 
saturated soil conditions for growth and reproduction. Wetlands 
generally include swamps, marshes, bogs, and similar areas such as 
sloughs, prairie potholes, wet meadows, river overflows, mud flats, and 
natural ponds. This definition includes those wetland areas separated 
from their natural supply of water as a result of activities such as 
the construction of structural flood protection methods or solid fill 
road beds and activities such as mineral extraction and navigation 
improvements. This definition includes both wetlands subject to and 
those not subject to section 404 of the Clean Water Act as well as 
constructed wetlands. It does not include ponds that do not conform to 
the definition above, or deep-water aquatic habitats such as streams, 
creeks, and rivers. (See Sec.  55.9 for appropriate data sources).
0
8. Amend Sec.  55.3 as follows:
0
a. Redesignate paragraphs (a) through (d) as (b) through (e);
0
b. Revise newly redesignated paragraphs (c)(1), (c)(4), (d), and (e);
0
c. Remove the word ``technical'' from newly redesignated paragraph 
(c)(3); and
0
d. Add new paragraphs (a) and (f).
    The revisions and additions read as follows:


Sec.  55.3  Assignment of responsibilities.

    (a) The implementation of Executive Orders 11988 and 11990 under 
this part shall be conducted by HUD for Department-administered 
programs subject to environmental review under 24 CFR part 50 and by 
authorized responsible entities that are responsible for environmental 
review under 24 CFR part 58.
* * * * *
    (c) * * *
    (1) Ensure compliance with this part for all actions under their 
jurisdiction that are proposed to be conducted, supported, or permitted 
in a floodplain or wetland, including taking full responsibility for 
all decisions made under their jurisdiction that are made pursuant to 
Sec.  55.20 for environmental reviews completed pursuant to 24 CFR part 
50;
* * * * *
    (4) Incorporate in departmental regulations, handbooks, and project 
and site standards those criteria, standards, and procedures related to 
compliance with this part.
    (d) Responsible Entity Certifying Officer. Certifying Officers of 
responsible entities administering or reviewing activities subject to 
24 CFR part 58 shall comply with this part in carrying out HUD-assisted 
programs. Certifying Officers shall monitor approved actions and ensure 
that any prescribed mitigation is implemented.
    (e) Grantees and Applicants. Grantees and Applicants that are not 
acting as responsible entities shall:
    (1) Supply HUD (or the responsible entity authorized by 24 CFR part 
58) with all available, relevant information necessary for HUD (or the 
responsible entity) to perform the compliance required by this part, 
including environmental review record documentation described in 24 CFR 
58.38, as applicable;
    (2) Implement mitigating measures required by HUD (or the 
responsible entity authorized by 24 CFR part 58) under this part or 
select alternate eligible property; and

[[Page 17769]]

    (3) Monitor approved actions and ensure that any prescribed 
mitigation is implemented.
    (f) Third party providers. Consultants and other parties to the 
environmental review process may prepare maps, studies (e.g., hydraulic 
and hydrologic studies), and reports to support compliance with this 
part, including identification of floodplains and wetlands and 
development of alternatives or minimization measures. The following 
responsibilities, however, may not be delegated to the third-party 
provider:
    (1) Receipt of public or agency comments;
    (2) Selection or rejection of alternatives analyzed in Step 3 of 
the 8-Step Process;
    (3) Selection or rejection of minimization measures analyzed in 
Step 5 of the 8-Step Process;
    (4) Determination whether avoidance of floodplain or wetland 
impacts, according to the purpose of Executive Orders 11988 and 11990, 
is or is not practicable.
0
9. Add Sec.  55.4 to subpart A to read as follows:


Sec.  55.4  Notification of floodplain hazard.

    (a) Notification for property owners, buyers, and developers. For 
actions in the FFRMS floodplain (as defined in Sec.  55.7), HUD (or 
HUD's designee) or the responsible entity must ensure that any party 
participating in the transaction is notified that the property is in 
the FFRMS floodplain and whether flood insurance is required or 
available in this location. Notification shall also include a 
description of the approximate elevation of the FFRMS floodplain, 
proximity to flood-related infrastructure impacting the site including 
dams and levees, the location of ingress and egress or evacuation 
routes relative to the FFRMS floodplain, disclosure of information on 
flood insurance claims filed on the property to the extent available 
from FEMA, and other relevant information such as available emergency 
notification resources.
    (b) Renter notification. For HUD-assisted and HUD-insured rental 
properties within the FFRMS floodplain, new and renewal leases must 
include acknowledgements signed by residents indicating that they have 
been advised that the property is in a floodplain and flood insurance 
is available for their personal property. Notification shall also 
include the location of ingress and egress routes relative to the FFRMS 
floodplain, available emergency notification resources, and the 
property's emergency procedures for residents in the event of flooding.
    (c) Conveyance restrictions for the disposition of multifamily real 
property. (1) In the disposition (including leasing) of multifamily 
properties acquired by HUD that are located in the FFRMS floodplain, 
the documents used for the conveyance must:
    (i) Refer to those uses that are restricted under identified 
Federal, State, or local floodplain regulations; and
    (ii) Include any land use restrictions limiting the use of the 
property by a grantee or purchaser and any successors under state or 
local laws.
    (2) (i) For disposition of multifamily properties acquired by HUD 
that are located in the FFRMS floodplain and contain critical actions, 
HUD shall, as a condition of approval of the disposition, require by 
covenant or comparable restriction on the property's use that the 
property owner and successive owners provide written notification to 
each current and prospective tenant concerning:
    (A) The hazards to life and to property for those persons who 
reside or work in a structure located within the FFRMS floodplain, and
    (B) The availability of flood insurance on the contents of their 
dwelling unit or business.
    (ii) The notice shall also be posted in the building so that it 
will be legible at all times and easily visible to all persons entering 
or using the building.
0
10. Add Sec.  55.5 to subpart A to read as follows:


Sec.  55.5  Flood insurance.

    (a)(1) As required by section 102(a) of the Flood Disaster 
Protection Act of 1973, as amended (42 U.S.C. 4012a), when HUD 
financial assistance (including mortgage insurance) is proposed for 
acquisition or construction purposes in any special flood hazard area 
(as designated by the Federal Emergency Management Agency (FEMA) on an 
effective Flood Insurance Rate Map (FIRM) or Flood Insurance Study 
(FIS), structures for which HUD financial assistance is provided must 
be covered by flood insurance in an amount at least equal to the 
project cost less estimated land cost, the outstanding principal 
balance of any HUD-assisted or HUD-insured loan, or the maximum limit 
of coverage available under the National Flood Insurance Program, 
whichever is least. Under section 202(a) of the Flood Disaster 
Protection Act of 1973, 42 U.S.C. 4106(a), such proposed assistance in 
any special flood hazard area shall not be approved in communities 
identified by FEMA as eligible for flood insurance but which are not 
participating in the National Flood Insurance Program. This prohibition 
only applies to proposed HUD financial assistance in a FEMA-designated 
special flood hazard area one year after the community has been 
formally notified by FEMA of the designation of the affected area. This 
requirement is not applicable to HUD financial assistance in the form 
of formula grants to states, including financial assistance under the 
State-administered CDBG Program (24 CFR part 570, subpart I) and, 
Emergency Solutions Grant amounts allocated to States (24 CFR part 
576), and HOME funds provided to a state under Title II of the 
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701-
12839). HUD strongly encourages that flood insurance be obtained and 
maintained for all HUD-assisted structures in the FFRMS floodplain, 
sites that have previously flooded, or sites in close proximity to a 
floodplain.
    (2) Under section 582 of the National Flood Insurance Reform Act of 
1994 (42 U.S.C. 5154a), HUD disaster assistance that is made available 
in a special flood hazard area may not be used to make a payment 
(including any loan assistance payment) to a person for repair, 
replacement, or restoration of damage to any personal, residential, or 
commercial property if:
    (i) The person had previously received Federal flood disaster 
assistance conditioned on obtaining and maintaining flood insurance; 
and
    (ii) The person failed to obtain and maintain the flood insurance.
    (b) HUD or the responsible entity may impose flood insurance 
requirements that exceed the minimums established by the Flood Disaster 
Protection Act of 1973 or by Tribal, state, or local requirements when 
needed to minimize financial risk from flood hazards. HUD and 
responsible entities have discretion to require that flood insurance be 
maintained for structures outside of the FEMA-mapped floodplain but 
within the FFRMS floodplain and/or that structures be insured up to the 
full replacement cost of the structure when needed to minimize 
financial risk from flood hazards. Nothing in this part limits 
additional flood insurance requirements that may be imposed by a 
mortgagee participating in a HUD assistance or mortgage insurance or 
guarantee program.
0
11. Add Sec.  55.6 to subpart A to read as follows:


Sec.  55.6  Complying with this part.

    (a) Process. The process to comply with this part is as follows:

[[Page 17770]]

    (1) HUD or the responsible entity shall determine whether 
compliance with this part is required. Refer to Sec.  55.12 for a list 
of activities that do not require further compliance with this part 
beyond the provisions of paragraph (c) of this section.
    (2) HUD or the responsible entity shall refer to Sec.  55.8 to 
determine whether the proposed action is eligible for HUD assistance or 
if it must be rejected as proposed.
    (3) If the project requires compliance under this part and is not 
prohibited by Sec.  55.8, HUD or the responsible entity shall refer to 
Sec.  55.13 to determine whether the 8-step decisionmaking process is 
required. If an exception in that section applies, the proposed project 
may proceed without further analysis under this part.
    (4) HUD or the responsible entity shall refer to Sec.  55.10 to 
determine whether an 8-step decisionmaking process for wetland 
protection is required or whether best practices to minimize potential 
indirect impacts to wetlands should be pursued.
    (5) HUD or the responsible entity shall determine whether an 
exception applies that would allow them to complete an abbreviated 
decisionmaking process pursuant to Sec.  55.14.
    (6) HUD or the responsible entity shall follow the decisionmaking 
process described in Sec.  55.20, eliminating any steps as permitted 
under Sec.  55.14.
    (b) Decisionmaking. HUD or the responsible entity shall determine 
whether to approve the action as proposed, approve the action with 
modifications or at an alternative site, or reject the proposed action, 
based on its analysis of the proposed risks and impacts. HUD or the 
responsible entity has discretion to reject any project where it 
determines that the level of flood hazard is incompatible with the 
proposed use of the site or that the extent of impacts to wetlands or 
to the beneficial function of floodplains is not acceptable, regardless 
of whether it would otherwise be acceptable under this part.
    (c) Other requirements. Refer to Sec. Sec.  55.4 and 55.5 to 
determine whether the proposed action may require notifications and/or 
flood insurance. Actions that do not require full compliance under this 
part may still trigger notification and flood insurance requirements.
    (d) Documentation. HUD or responsible shall require that all of the 
analysis required under this part, including applicable exceptions and 
all required steps described in Sec.  55.20, be documented in the 
environmental review record.

Subpart B--Application of Executive Orders on Floodplain Management 
and Protection of Wetlands

0
12. Add Sec.  55.7 to subpart B to read as follows:


Sec.  55.7  Identifying the FFRMS floodplain.

    (a) HUD or the responsible entity shall determine all compliance 
with the floodplain review requirements of this part based on the FFRMS 
floodplain.
    (b) For a non-critical action, HUD or the responsible entity shall 
define the FFRMS floodplain using the following process:
    (1) If HUD-approved maps of the jurisdiction have been developed 
using a climate-informed science approach (CISA), those areas 
designated as having an elevated flood risk during the anticipated life 
of the project; or
    (2) If CISA data as described above is not available but FEMA has 
defined the 0.2-percent-annual-chance floodplain, those areas that FEMA 
has designated as within the 0.2-percent-annual-chance floodplain; or
    (3) If neither CISA nor FEMA-mapped 0.2-percent-annual-chance 
floodplain data is available, those areas that result from adding an 
additional two feet to the base flood elevation as established by the 
effective FIRM or FIS or--if available--FEMA-provided preliminary or 
pending maps or studies or advisory base flood elevations.
    (4) The latest of these resources shall be used. However, a base 
flood elevation based on CISA data or an interim or preliminary FEMA 
map cannot be used if it is lower than the base flood elevation on the 
current FIRM or FIS.
    (c) For a critical action, the FFRMS floodplain is either:
    (1) If HUD-approved CISA maps of the jurisdiction have been 
developed, those areas designated as having an elevated flood risk--as 
determined based on the criticality of the action--during the 
anticipated life of the project; or
    (2) If CISA data as described above is not available, an area 
either within the 0.2-percent-annual-chance floodplain or within the 
area that results from adding an additional three feet to the base 
flood elevation. The larger floodplain and higher elevation must be 
applied where the 500-year floodplain is mapped. If FEMA resources do 
not map the 0.2-percent-annual-chance floodplain, the FFRMS floodplain 
is the area that results from adding an additional three feet to the 
base flood elevation based on best available information.
    (d) If FEMA FIRMS, FIS, preliminary maps or advisory base flood 
elevations are unavailable or insufficiently detailed to determine base 
flood elevation and if CISA data is not available, other Federal, 
Tribal, State, or local data shall be used as ``best available 
information.'' If best available information is based only on past 
flooding and does not consider future flood risk:
    (1) For non-critical actions, the FFRMS floodplain includes those 
areas that result from adding an additional two feet to the 1-base 
flood elevation based on best available information.
    (2) For critical actions, the FFRMS floodplain is the higher of the 
0.2-percent-annual-chance floodplain based on best available 
information or areas that result from adding an additional three feet 
to the base flood elevation based on best available information.
    (e) When preparing an Environmental Impact Statement (EIS), an 
analysis of the best available, actionable climate science, as 
determined by HUD or the responsible entity, must be performed to 
define the FFRMS floodplain. These sources may supplement the FIRM or 
ABFE in order to better minimize impacts to projects or to elevate or 
floodproof structures above the risk adjusted floodplain. These sources 
may not be used as a basis for a lower elevation than otherwise 
required under this part.
    (f) Nothing in this part limits the voluntary use of CISA, where 
available, by responsible entities to define the FFRMS floodplain on a 
project-specific basis where HUD-approved jurisdictional maps are not 
available; however, this approach may not be used as a basis for a 
lower elevation than otherwise required under this section.
0
13. Add Sec.  55.8 to subpart B read as follows:


Sec.  55.8  Limitations on HUD assistance in floodplains.

    (a) HUD financial assistance (including mortgage insurance) may not 
be approved with respect to:
    (1) Any action located in a floodway unless one of the following 
applies:
    (i) An exception listed in Sec.  55.12 applies; or
    (ii) A permanent covenant or comparable restriction will preserve 
all onsite FFRMS floodplain and/or wetland areas from future 
development or improvements beyond maintenance of existing uses listed 
in paragraphs (A) through (C) below and the proposed project site 
contains no buildings or improvements that modify or occupy the 
floodway, except that the presence of the following will not prohibit 
the approval of HUD financial assistance:
    (A) Functionally dependent uses (as defined in Sec.  55.2(b)(7)) 
and utility lines;

[[Page 17771]]

    (B) De minimis improvements (such as landscaping improvements, 
sports courts, or trails), including minimal ground disturbance or 
placement of impervious surface area to ensure accessibility where this 
is permitted by local ordinances and does not increase flood risk to 
the property; or
    (C) Buildings and improvements that will be removed as part of the 
proposed action.
    (2) Any critical action located in a floodway, coastal high hazard 
area or LiMWA; or
    (3) Any noncritical action located in a coastal high hazard area, 
or LiMWA, unless the action is a functionally dependent use, is limited 
to existing structures or improvements, or is reconstruction following 
destruction caused by a disaster. If the action is not a functionally 
dependent use, the action must be designed for location in a coastal 
high hazard area. An action will be considered designed for a coastal 
high hazard area if:
    (i) In the case of reconstruction following destruction caused by a 
disaster, or substantial improvement, the work meets the current 
standards for V zones in FEMA regulations (44 CFR 60.3(e)) and, if 
applicable, the Minimum Property Standards for such construction in 24 
CFR 200.926d(c)(4)(iii); or
    (ii) In the case of existing construction (including any minor 
improvements that are not substantial improvement):
    (A) The work met FEMA elevation and construction standards for a 
coastal high hazard area (or if such a zone or such standards were not 
designated, the 1-percent-annual-chance floodplain) applicable at the 
time the original improvements were constructed; or
    (B) If the original improvements were constructed before FEMA 
standards for the 1-percent-annual-chance floodplain became effective 
or before FEMA designated the location of the action as within the 1-
percent-annual-chance floodplain, the work would meet at least the 
earliest FEMA standards for construction in the 1-percent-annual-chance 
floodplain.
    (b) All determinations made pursuant to this section shall be based 
on the effective FIRM or FIS unless FEMA has provided more current 
information. When FEMA provides interim flood hazard data, such as ABFE 
or preliminary maps and studies, HUD or the responsible entity shall 
use the latest of these sources. However, a base flood elevation from 
an interim or preliminary source cannot be used if it is lower than the 
base flood elevation on the current FIRM and FIS.
    (c) Where HUD assistance is proposed for actions subject to Sec.  
55.20 on structures designated by FEMA as Severe Repetitive Loss (SRL) 
properties, and FEMA has approved measures that if implemented would 
qualify the property for a status of ``Mitigated'' as to the SRL list, 
HUD or the responsible entity will ensure that FEMA-identified 
mitigation measures are addressed under Sec.  55.20(e).
0
14. Add Sec.  55.9 to subpart B to read as follows:


Sec.  55.9  Identifying wetlands.

    The following process shall be followed in making the wetlands 
determination:
    (a) HUD or the responsible entity shall determine whether the 
action involves new construction that is located in a wetland.
    (b) As primary screening, HUD or the responsible entity shall 
verify whether the project area is located in proximity to wetlands 
identified on the National Wetlands Inventory (NWI) and assess the site 
for visual indication of the presence of wetlands such as hydrology 
(water), hydric soils, or wetland vegetation. Where the primary 
screening is inconclusive, potential wetlands should be further 
evaluated using one or more of the following methods:
    (i) Consultation with the Department of the Interior, Fish and 
Wildlife Service (FWS), for information concerning the location, 
boundaries, scale, and classification of wetlands within the area.
    (ii) Reference to the Department of Agriculture, Natural Resources 
Conservation Service (NRCS) National Soil Survey (NSS), and any Tribal, 
State, or local information concerning the location, boundaries, scale, 
and classification of wetlands within the action area and further site 
study by the environmental review preparer with reference to Federal 
guidance on field identification of the biological (rather than 
jurisdictional) characteristics of wetlands.
    (iii) Evaluation by a qualified wetlands scientist to delineate the 
wetland boundaries on site.
0
15. Revise Sec.  55.10 to read as follows:


Sec.  55.10  Limitations on HUD assistance in wetlands.

    (a) When the proposed project includes new construction activities 
(including grading, clearing, draining, filling, diking, and 
impounding) that will have a direct impact to onsite wetlands 
identified by the process described in Sec.  55.9, compliance with this 
part requires completion of the 8-step process in Sec.  55.20 to 
address wetland impacts.
    (b) When the proposed project may indirectly affect wetlands by 
modifying the flow of stormwater, releasing pollutants, or otherwise 
changing conditions that contribute to wetlands viability, the 
significance of these impacts must be evaluated and minimized through 
best management practices. If the project site includes wetlands that 
will not be impacted by new construction, HUD strongly encourages 
measures to preserve such wetlands from future impacts, including by 
obtaining a restrictive covenant, conservation easement, or other 
mechanism.
    (c) When the proposed project may indirectly affect off-site 
wetlands, impacts should be minimized to the extent practicable. While 
this part does not require further decisionmaking to address these 
effects under the authority of Executive Order 11990, measures to 
address offsite wetlands impacts may be necessary to comply with 
related laws and authorities including the Endangered Species Act or to 
address significant impacts under the National Environmental Policy 
Act.


Sec.  55.11  [Removed and Reserved]

0
16. Remove and reserve Sec.  55.11.
0
17. Revise Sec.  55.12 to read as follows:


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

    With the exception of the flood insurance requirements in Sec.  
55.5, this part shall not apply to the following categories of proposed 
HUD actions:
    (a) HUD-assisted activities described in 24 CFR 58.34 and 58.35(b);
    (b) HUD-assisted activities described in 24 CFR 50.19, except as 
otherwise indicated in Sec.  50.19;
    (c) The approval of financial assistance for restoring and 
preserving the natural and beneficial functions and values of 
floodplains and wetlands, including through acquisition of such 
floodplain and wetland property, where a permanent covenant or 
comparable restriction is placed on the property's continued use for 
flood control, wetland protection, open space, or park land, but only 
if:
    (1) The property is cleared of all existing buildings and walled 
structures; and
    (2) The property is cleared of related improvements except those 
which:
    (i) Are directly related to flood control, wetland protection, open 
space, or park land (including playgrounds and recreation areas);
    (ii) Do not modify existing wetland areas or involve fill, paving, 
or other ground disturbance beyond minimal trails or paths; and

[[Page 17772]]

    (iii) Are designed to be compatible with the beneficial floodplain 
or wetland function of the property.
    (d) An action involving a repossession, receivership, foreclosure, 
or similar acquisition of property to protect or enforce HUD's 
financial interests under previously approved loans, grants, mortgage 
insurance, or other HUD assistance;
    (e) Policy-level actions described at 24 CFR 50.16 that do not 
involve site-based decisions;
    (f) A minor amendment to a previously approved action with no 
additional adverse impact on or from a floodplain or wetland;
    (g) HUD's or the responsible entity's approval of a project site, 
an incidental portion of which is situated in the FFRMS floodplain (not 
including the floodway, LiMWA, or coastal high hazard area), but only 
if:
    (1) The proposed project site does not include any existing or 
proposed buildings or improvements that modify or occupy the FFRMS 
floodplain except de minimis improvements such as recreation areas and 
trails;
    (2) The proposed project will not result in any new construction in 
or modifications of a wetland; and
    (3) A permanent covenant or comparable restriction will prevent all 
future development or improvements in the onsite FFRMS floodplain and/
or wetland areas.
    (h) Issuance or use of Housing Vouchers or other forms of rental 
subsidy where HUD, the awarding community, or the public housing agency 
that administers the contract awards rental subsidies that are not 
project-based (i.e., do not involve site-specific subsidies);
    (i) Special projects directed to the removal of material and 
architectural barriers that restrict the mobility of and accessibility 
to elderly and persons with disabilities.
0
18. Add Sec.  55.13 to subpart B to read as follows:


Sec.  55.13  Inapplicability of 8-step decisionmaking process to 
certain categories of proposed actions.

    The decisionmaking process in Sec.  55.20 shall not apply to the 
following categories of proposed actions:
    (a) HUD's mortgage insurance actions and other financial assistance 
for the purchasing, mortgaging, or refinancing of existing one- to 
four-family properties in communities that are in the Regular Program 
of the NFIP and in good standing (i.e., not suspended from program 
eligibility or placed on probation under 44 CFR 59.24), where the 
action is not a critical action and the property is not located in a 
floodway, coastal high hazard area, or LiMWA;
    (b) Financial assistance for minor repairs or improvements on one- 
to four-family properties that do not meet the thresholds for 
``substantial improvement'' under Sec.  55.2(b)(12);
    (c) HUD or a recipient's actions involving the disposition of 
individual HUD or recipient held, one- to four-family properties;
    (d) HUD guarantees under the Loan Guarantee Recovery Fund Program 
(24 CFR part 573), where any new construction or rehabilitation 
financed by the existing loan or mortgage has been completed prior to 
the filing of an application under the program, and the refinancing 
will not allow further construction or rehabilitation, nor result in 
any physical impacts or changes except for routine maintenance;
    (e) The approval of financial assistance to lease units within an 
existing structure located within the floodplain, but only if;
    (1) The structure is located outside the floodway or coastal high 
hazard area, and is in a community that is in the Regular Program of 
the NFIP and in good standing (i.e., not suspended from program 
eligibility or placed on probation under 44 CFR 59.24); and
    (2) The project is not a critical action.
    (f) Special projects for the purpose of improving efficiency of 
utilities or installing renewable energy that involve the repair, 
rehabilitation, modernization, weatherization, or improvement of 
existing structures or infrastructure, do not meet the thresholds for 
``substantial improvement'' under Sec.  55.2(b)(12), and do not include 
the installation of equipment below the FFRMS floodplain elevation; and
    (g) The guarantee of one-to-four family mortgages under the Direct 
Guarantee procedure for the Section 184 Indian Housing loan guarantee 
program or the Section 184A Native Hawaiian Housing loan guarantee 
program.
0
19. Add Sec.  55.14 to subpart B to read as follows:


Sec.  55.14  Modified 5-step decisionmaking process for certain 
categories of proposed actions.

    The decisionmaking steps in Sec.  55.20(b), (c), and (g) (steps 2, 
3, and 7) do not apply to the following categories of proposed actions:
    (a) HUD's or the recipient's actions involving the disposition of 
acquired multifamily housing projects or ``bulk sales'' of HUD-acquired 
(or under part 58 of recipients') one- to four-family properties in 
communities that are in the Regular Program of the NFIP and in good 
standing (i.e., not suspended from program eligibility or placed on 
probation under 44 CFR 59.24). For programs subject to part 58, this 
paragraph applies only to recipients' disposition activities that are 
subject to review under part 58.
    (b) HUD's actions under the National Housing Act (12 U.S.C. 1701 et 
seq.) for the purchase or refinancing of existing multifamily housing 
projects, hospitals, nursing homes, assisted living facilities, board 
and care facilities, and intermediate care facilities, in communities 
that are in good standing under the NFIP.
    (c) HUD's or the recipient's actions under any HUD program 
involving the repair, rehabilitation, modernization, weatherization, or 
improvement of existing multifamily housing projects, hospitals, 
nursing homes, assisted living facilities, board and care facilities, 
intermediate care facilities, and one- to four-family properties, in 
communities that are in the Regular Program of the NFIP and are in good 
standing, provided that the number of units is not increased more than 
20 percent, the action does not involve a conversion from 
nonresidential to residential land use, the action does not meet the 
thresholds for ``substantial improvement'' under Sec.  55.2(b)(12), and 
the footprint of the structure and paved areas is not increased by more 
than 20 percent.
    (d) HUD's or the recipient's actions under any HUD program 
involving the repair, rehabilitation, modernization, weatherization, or 
improvement of existing nonresidential buildings and structures, in 
communities that are in the Regular Program of the NFIP and are in good 
standing, provided that the action does not meet the thresholds for 
``substantial improvement'' under Sec.  55.2(b)(12) and that the 
footprint of the structure and paved areas is not increased by more 
than 20 percent.
    (e) HUD's or the recipient's actions under any HUD program 
involving the repair, rehabilitation, or replacement of existing 
nonstructural improvements including streets, curbs and gutters, where 
any increase of the total impervious surface area of the facility is de 
minimis. This provision does not include critical actions, levee 
systems, chemical storage facilities (including any tanks), wastewater 
facilities, or sewer lagoons.

Subpart C--Procedures for Making Determinations on Floodplain 
Management and Protection of Wetlands

0
20. Add 55.16 to subpart C to read as follows:

[[Page 17773]]

Sec.  55.16  Applicability of subpart C decisionmaking process.

    The following table indicates the applicability, by location and 
type of action, of the decisionmaking process for implementing 
Executive Order 11988 and Executive Order 11990 under subpart C of this 
part.

                                             Table 1 to Sec.   55.16
----------------------------------------------------------------------------------------------------------------
                                                                                             Wetlands or FFRMS
    Type of proposed action (new                                                            floodplain outside
 reviewable action or an amendment)         Floodways          Coastal high hazard and      coastal high hazard
                \1\                                                  LiMWA areas           area, LiMWA area, and
                                                                                                 floodways
----------------------------------------------------------------------------------------------------------------
Critical actions as defined in Sec.  Critical actions not    Critical actions not         Allowed if the
   55.2(b)(3).                        allowed.                allowed.                     proposed critical
                                                                                           action is processed
                                                                                           under Sec.
                                                                                           55.20.\2\
Noncritical actions not excluded     Allowed only if the     Allowed only if the          Allowed if proposed
 under Sec.   55.12 or 55.13.         proposed non-critical   proposed noncritical         noncritical action is
                                      action is not           action is processed under    processed under Sec.
                                      prohibited under Sec.   Sec.   55.20 \2\ and is       55.20.\2\
                                        55.8(a)(1) and is     (1) a functionally
                                      processed under Sec.    dependent use, (2)
                                       55.20 \2\.             existing construction
                                                              (including improvements),
                                                              or (3) reconstruction
                                                              following destruction
                                                              caused by a disaster. If
                                                              the action is not a
                                                              functionally dependent
                                                              use, the action must be
                                                              designed for location in a
                                                              coastal high hazard area
                                                              under Sec.   55.8(a)(3).
----------------------------------------------------------------------------------------------------------------
\1\ Under Executive Order 11990, the decisionmaking process in Sec.   55.20 only applies to Federal assistance
  for new construction in wetlands locations.
\2\ Or those paragraphs of Sec.   55.20 that are applicable to an action listed in Sec.   55.14.

0
21. Amend Sec.  55.20 as follows:
0
a. Revise the undesignated introductory paragraph, paragraph (a), the 
introductory text to paragraph (b), paragraphs (b)(1) and (2), the 
introductory text of paragraph (c), paragraphs (c)(1)(i) and (ii), 
paragraphs (c)(2), (c)(2)(iii), and (c)(3), the introductory text of 
paragraph (d), paragraphs (d)(1), (d)(2), (d)(2)(i), and (e), the 
introductory text of paragraph (f), paragraphs (g)(1) and (f)(2)(ii);
0
b. Amend paragraph (b)(3) by removing the word ``HUD'' from the last 
sentence and adding, in its place, the word ``HUD's''; and
0
c. Add paragraphs (b)(4) and (f)(2)(iii).
    The revisions and additions read as follows:


Sec.  55.20  Decisionmaking process.

    Except for actions covered by Sec.  55.14, the decisionmaking 
process for compliance with this part contains eight steps, including 
public notices and an examination of practicable alternatives when 
addressing floodplains and wetlands. Third parties may provide analysis 
and information to support the decisionmaking process; however, final 
determinations for each step, authorization of public notices, and 
receipt of public comments, are the responsibility of HUD or the 
responsible entity. The steps to be followed in the decisionmaking 
process are as follows:
    (a) Step 1. Using the processes described in Sec. Sec.  55.7 and 
55.9, determine whether the proposed action is located in the FFRMS 
floodplain, or results in new construction in a wetland. If the action 
does not occur in the FFRMS floodplain or include new construction in a 
wetland, then no further compliance with this part is required. Where 
the proposed action would be located in the FFRMS floodplain and 
includes construction in a wetland, these impacts should be evaluated 
together in a single 8-step decisionmaking process. In such a case, the 
wetland will be considered among the primary natural and beneficial 
functions and values of the floodplain. For purposes of this section, 
an ``action'' includes areas required for ingress and egress, even if 
they are not within the site boundary, and other integral components of 
the proposed action, even if they are not within the site boundary.
    (b) Step 2. Notify the public and agencies responsible for 
floodplain management or wetlands protection at the earliest possible 
time of a proposal to consider an action in a FFRMS floodplain or 
wetland and involve the affected and interested public and agencies in 
the decisionmaking process.
    (1) The public notices required by paragraphs (b) and (g) of this 
section may be combined with other project notices wherever 
appropriate. Notices required under this part must be bilingual or 
multilingual, as appropriate, if the affected public has Limited 
English Proficiency. In addition, all notices must be published in a 
newspaper of general circulation in the affected community or on an 
appropriate government website that is accessible to individuals with 
disabilities and provides meaningful access for individuals with 
Limited English Proficiency, and must be sent to Federal, State, and 
local public agencies, organizations, and, where not otherwise covered, 
individuals known to be interested in the proposed action.
    (2) A minimum of 15 calendar days shall be allowed for comment on 
the public notice. The first day of a time period begins at 12:01 a.m. 
local time on the day following the publication or the mailing and 
posting date of the notice which initiates the time period.
* * * * *
    (4) When the proposed activity is located in or affects a community 
with environmental justice concerns under Executive Order 12898, public 
comment and decisionmaking under this part shall be coordinated with 
consultation and decisionmaking under HUD policies implementing 24 CFR 
58.5(j) or 50.4(l).
    (c) Step 3. Identify and evaluate practicable alternatives to 
locating the proposed action in the FFRMS floodplain or wetland.
    (1) * * *
    (i) Locations outside and not affecting the FFRMS floodplain or 
wetland;
    (ii) Alternative methods to serve the identical project objective, 
including but not limited to design alternatives such as repositioning 
or reconfiguring proposed siting of structures and improvements to 
avoid floodplain and wetland impacts; and
* * * * *
    (2) Practicability of alternatives should be addressed in light of 
the goals identified in the project description related to the 
following:
* * * * *
    (iii) Economic values such as the cost of space, construction, 
services,

[[Page 17774]]

relocation, potential property losses from flooding, and cost of flood 
insurance.
    (3) For multifamily and healthcare projects involving HUD mortgage 
insurance that are initiated by third parties, HUD in its consideration 
of practicable alternatives is not required to consider alternative 
sites, but must include consideration of:
    (i) A determination to approve the request without modification;
    (ii) A determination to approve the request with modification; and
    (iii) A determination not to approve the request.
    (d) Step 4. Identify and evaluate the potential direct and indirect 
impacts associated with the occupancy or modification of the FFRMS 
floodplain or the wetland and the potential direct and indirect support 
of floodplain and wetland development that could result from the 
proposed action, including impacts related to future climate-related 
flood levels, sea level rise, and the related increased value of 
beneficial floodplain and wetland functions.
    (1) Floodplain evaluation: The floodplain evaluation for the 
proposed action must evaluate floodplain characteristics (both existing 
and as proposed for modification by the project) to determine potential 
adverse impacts to lives, property, and natural and beneficial 
floodplain values as compared with alternatives identified in Step 3.
    (i) Floodplain characteristics include:
    (A) Identification of portions of the site that are subject to 
flood risk, documented through mapping and, as required by Sec.  
55.7(e) or commensurate with the scale of the project and available 
resources as permitted by Sec.  55.7(f), climate-informed analysis of 
factors including development patterns, streamflow, and hydrologic and 
hydraulic modeling;
    (B) Topographic information that can inform flooding patterns and 
distance to flood sources, as described in flood mapping, Flood 
Insurance Studies, and other data sources; and
    (C) Public safety communications and data related to flood risk 
including available information on structures such as dams, levees, or 
other flood protection infrastructure located in proximity to the site.
    (ii) Impacts to lives and property include:
    (A) Potential loss of life, injury, or hardship to residents of the 
subject property during a flood event;
    (B) Damage to the subject property during a flood event;
    (C) Damage to surrounding properties from increased runoff or 
reduction in floodplain function during a flood event due to 
modification of the subject site;
    (D) Health impacts due to exposure to toxic substance releases that 
may be caused or exacerbated by flood events; and
    (E) Damage to a community as a result of project failure (e.g., 
failure of stormwater management infrastructure due to scouring).
    (iii) Impacts to natural and beneficial values include changes to:
    (A) Water resources such as natural moderation of floods, water 
quality maintenance, and groundwater recharge;
    (B) Living resources such as flora and fauna (If the project 
requires consultation under 24 CFR 50.4(e) or 58.5(e), consultation 
with the U.S. Fish and Wildlife Service or National Marine Fisheries 
Service must include a description of impacts evaluated under this 
part);
    (C) Cultural resources such as archaeological, historic, aesthetic, 
and recreational aspects; and
    (D) Agricultural, aquacultural, and forestry resources.
    (2) Wetland evaluation: In accordance with Section 5 of Executive 
Order 11990, the decisionmaker shall consider factors relevant to a 
proposal's effect on the survival and quality of the wetland. Factors 
that must be evaluated include, but are not limited to:
    (i) Public health, safety, and welfare, including water supply, 
quality, recharge, and discharge; pollution; flood and storm hazards 
and hazard protection; and sediment and erosion, including the impact 
of increased quantity or velocity of stormwater runoff on, or to areas 
outside of, the proposed site;
* * * * *
    (e) Step 5. Where practicable, design or modify the proposed action 
to minimize the potential adverse impacts to and from the FFRMS 
floodplain or wetland and to restore and preserve their natural and 
beneficial functions and values.
    (1) Elevation. For actions in the FFRMS floodplain, the required 
elevation described in this section must be documented on an Elevation 
Certificate or a Floodproofing Certificate in the Environmental Review 
Record prior to construction, or by such other means as HUD may from 
time to time direct, provided that notwithstanding any language to the 
contrary, the minimum elevation or floodproofing requirement for new 
construction or substantial improvement actions shall be the elevation 
of the FFRMS floodplain as defined in this section.
    (i) If a residential structure undergoing new construction or 
substantial improvement is located in the FFRMS floodplain, the lowest 
floor or FEMA-approved equivalent must be designed using the elevation 
of the FFRMS floodplain as the baseline standard for elevation, except 
where higher elevations are required by Tribal, State, or locally 
adopted code or standards, in which case those higher elevations apply. 
Where non-elevation standards such as setbacks or other flood risk 
reduction standards that have been issued to identify, communicate, or 
reduce the risks and costs of floods are required by Tribal, state, or 
locally adopted code or standards, those standards shall apply in 
addition to the FFRMS baseline elevation standard.
    (ii) New construction and substantial improvement of non-
residential structures, or residential structures that have no dwelling 
units and no residents below the FFRMS floodplain and that are not 
critical actions as defined at Sec.  55.2(b)(3), shall be designed 
either:
    (A) With the lowest floor, including basement, elevated to or above 
the elevation of the FFRMS floodplain; or
    (B) With the structure floodproofed at least up to the elevation of 
the FFRMS floodplain. Floodproofing standards are as stated in FEMA's 
regulations at 44 CFR 60.3(c)(3)(ii) and 60.3(c)(4)(i), or such other 
regulatory standard as FEMA may issue, and applicable guidance, except 
that where the standard refers to base flood level, floodproofing is 
required at or above the FFRMS floodplain, as defined in this part.
    (iii) The term ``lowest floor'' must be applied consistent with 
FEMA regulations in 44 CFR 59.1 and FEMA's Elevation Certificate 
guidance or other applicable current FEMA guidance.
    (2) Minimization. Minimization requires HUD or the responsible 
entity to reduce harm to the smallest possible degree. Potential harm 
to or within the floodplain and/or wetland must be reduced to the 
smallest possible amount. E.O. 11988's requirement to minimize 
potential harm applies to (1) the investment at risk, or the flood loss 
potential of the action itself, (2) the impact the action may have on 
others, and (3) the impact the action may have on floodplain and 
wetland values. The record must include a discussion of all 
minimization techniques that will be incorporated into project designs 
as well as those that were considered but not approved. Minimization 
techniques for floodplain and wetlands purposes include, but are not 
limited to:
    (i) Stormwater management and green infrastructure: the use of 
permeable surfaces; natural landscape

[[Page 17775]]

enhancements that maintain or restore natural hydrology through 
infiltration, native plant species, bioswales, rain gardens, or 
evapotranspiration; stormwater capture and reuse; green or vegetative 
roofs with drainage provisions; WaterSense products; rain barrels and 
grey water diversion systems; protective gates or angled safety grates 
for culverts and stormwater drains; and other low impact development 
and green infrastructure strategies, technologies, and techniques. 
Where possible, use natural systems, ecosystem processes, and nature-
based approaches when developing alternatives for consideration.
    (ii) Adjusting project footprint: evaluate options to relocate or 
redesign structures, amenities, and infrastructure to minimize the 
amount of impermeable surfaces and other impacts in the FFRMS 
floodplain or wetland. This may include changes such as designing 
structures to be taller and narrower or avoiding tree clearing to 
reduce potential erosion from flooding.
    (iii) Resilient building standards: consider implementing resilient 
building codes or standards to ensure a reliable and consistent level 
of safety.
    (3) Restoration and preservation. Restore means to reestablish a 
setting or environment in which the natural and beneficial values of 
floodplains and wetlands could again function. Where floodplain and 
wetland values have been degraded by past actions, restoration is 
informed by evaluation of the impacts of such actions on beneficial 
values of the floodplain or wetland, and identification, evaluation, 
and implementation of practicable measures to restore the values 
diminished or lost. Preserve means to prevent modification to the 
natural floodplain or wetland environment, or to maintain it as closely 
as possible to its natural state. If an action will result in harm to 
or within the floodplain or wetland, HUD or the responsible entity must 
ensure that the action is designed or modified to assure that it will 
be carried out in a manner which preserves as much of the natural and 
beneficial floodplain and values as is possible. Restoration and 
preservation techniques for floodplain and wetlands purposes include, 
but are not limited to:
    (i) Natural Resource Conservation Service or other conservation 
easements;
    (ii) Appropriate and practicable compensatory mitigation is 
required for unavoidable adverse impacts to more than one acre of 
wetlands. Compensatory mitigation includes but is not limited to: 
permittee-responsible mitigation, mitigation banking, in-lieu fee 
mitigation, the use of preservation easements or protective covenants, 
and any form of mitigation promoted by State or Federal agencies. The 
use of compensatory mitigation may not substitute for the requirement 
to avoid and minimize impacts to the maximum extent practicable.
    (4) Planning for residents' and occupants' safety. (i) For 
multifamily residential properties, an evacuation plan must be 
developed that includes safe egress route(s) out of the FFRMS 
floodplain, plans for evacuating residents with special needs, and 
clear communication of the evacuation plan and safety resources for 
residents.
    (ii) For healthcare facilities, evacuation route(s) out of the 
FFRMS floodplain must be identified and clearly communicated to all 
residents and employees. Such actions must include a plan for emergency 
evacuation and relocation to a facility of like capacity that is 
equipped to provide required critical needs-related care and services 
at a level similar to the originating facility.
    (iii) All critical actions in the FFRMS floodplain must operate and 
maintain an early warning system that serves all facility occupants.
    (f) Step 6. HUD or the responsible entity shall consider the 
totality of the previous steps and the criteria in this subsection to 
make a decision as to whether to approve, approve with modifications, 
or reject the proposed action. Adverse impacts to floodplains and 
wetlands must be avoided if there is a practicable alternative. This 
analysis must consider:
* * * * *
    (2) * * *
    (ii) A reevaluation of alternatives under this step should include 
a discussion of economic costs. For floodplains, the cost estimates 
should include savings or the costs of flood insurance, where 
applicable; flood proofing; replacement of services or functions of 
critical actions that might be lost; and elevation to at least the 
elevation of the FFRMS floodplain, as appropriate based on the 
applicable source under Sec.  55.7. For wetlands, the cost estimates 
should include the cost of filling the wetlands and mitigation.
    (iii) If the proposed activity is located in or affects a community 
with environmental justice concerns under E.O. 12898, the reevaluation 
must address public input provided during environmental justice 
outreach (if conducted) and must document the ways in which the 
activity, in light of information analyzed, mitigation measures 
applied, and alternatives selected, serves to reduce any historical 
environmental disparities related to flood risk or wetlands impacts in 
the community.
    (g) * * *
    (1) If the reevaluation results in a determination that there is no 
practicable alternative to locating the proposal in the FFRMS 
floodplain or the wetland, publish a final notice that includes:
* * * * *
0
22. Revise Sec.  55.21 to read as follows:


Sec.  55.21  Alternate processing for existing nonconforming sites.

    Notwithstanding the limitations on HUD assistance defined in Sec.  
55.8, in exceptional circumstances, the Assistant Secretary for 
Community Planning and Development may approve HUD assistance or 
insurance to improve an existing property with ongoing HUD assistance 
or mortgage insurance if the following conditions are satisfied:
    (a) HUD completes an environmental review pursuant to part 50, 
including the 8-step decisionmaking process pursuant to Sec.  55.20, 
that:
    (1) Documents that it is not practicable to transfer the HUD 
assistance to a site with lower flood risk under existing program 
rules, financial limitations, and site availability; and
    (2) Mandates measures to ensure that the elevated flood risk is the 
only environmental hazard or impact that does not comply, or that 
requires mitigation to comply with HUD's environmental requirements at 
24 CFR parts 50, 51, 55, and 58; and
    (b) The proposed project incorporates all practicable measures to 
meaningfully reduce flood risk and increase the overall resilience of 
the site, including but not limited to elevation or floodproofing of 
all structures in the FFRMS floodplain, removing all residential units 
from the floodway, identification of evacuation route(s) out of the 
FFRMS floodplain, and other measures to minimize flood risk and 
preserve the function of the floodplain and any impacted wetlands as 
described in Sec.  55.20(e).


Sec. Sec.  55.22, 55.24 and 55.25  [Removed and Reserved]

0
23. Remove and reserve Sec. Sec.  55.22, 55.24, and 55.25.
0
24. In Sec.  55.26, revise the introductory text and paragraphs (b)(1) 
and (c) to read as follows:


Sec.  55.26  Adoption of another agency's review under the Executive 
Orders.

    If a proposed action covered under this part is already covered in 
a prior review performed under Executive

[[Page 17776]]

Order 11988 or Executive Order 11990 by another agency, including HUD 
or a different responsible entity, that review may be adopted by HUD or 
by a responsible entity authorized under 24 CFR part 58 without further 
public notice, provided that:
* * * * *
    (b) * * *
    (1) The action currently proposed has not substantially changed in 
project description, scope, and magnitude from the action previously 
reviewed by the other agency; and
* * * * *
    (c) HUD assistance must be conditioned on mitigation measures 
prescribed in the previous review.


Sec. Sec.  55.27 and 55.28  [Removed and Reserved]

0
25. Remove and reserve Sec. Sec.  55.27 and 55.28.

PART 58--ENVIRONMENTAL REVIEW PROCEDURES FOR ASSUMING HUD 
ENVIRONMENTAL REVIEW RESPONSIBILITIES

0
26. The authority citation for part 58 continues to read as follows:

    Authority: 12 U.S.C. 1707 note, 1715z-13a(k); 25 U.S.C. 4115 and 
4226; 42 U.S.C. 1437x, 3535(d), 3547, 4321-4335, 4852, 5304(g), 
12838, and 12905(h); title II of Pub. L. 105-276; E.O. 11514 as 
amended by E.O. 11991, 3 CFR, 1977 Comp., p. 123.

0
27. Revise Sec.  58.5(b)(1) as follows:


Sec.  58.5  Related Federal laws and authorities.

* * * * *
    (b) * * *
    (1) Executive Order 11988, Floodplain Management, as amended by 
Executive Order 13690, February 4, 2015 (80 FR 6425), 3 CFR, 2015 
Comp., p. 6425, as interpreted in HUD regulations at 24 CFR part 55.
* * * * *


Sec.  58.43  [Amended]

0
28. In Sec.  58.43(a):
0
a. Remove ``tribal, local, State and Federal agencies;'' and add in its 
place ``Tribal, Federal, State and local agencies''; and
0
b. Add ``or on an appropriate Government website that is accessible to 
individuals with disabilities and provides meaningful access for 
individuals with Limited English Proficiency'' between ``affected 
community'' and the period ending the sentence.


Sec.  58.45  [Amended]

0
29. In Sec.  58.45, paragraphs (a), (b), and (c), add ``in a general 
circulation newspaper or on a Government website that is accessible to 
individuals with disabilities and provides meaningful access for 
individuals with Limited English Proficiency'' after ``published''.


Sec.  58.59  [Amended]

0
30. In the introductory text of paragraph (b), add ``or on an 
appropriate Government website that is accessible to individuals with 
disabilities and provides meaningful access for individuals with 
Limited English Proficiency'' after ``news media''.

PART 200--INTRODUCTION TO FHA PROGRAMS

0
31. The authority citation for part 200 continues to read:

    Authority: 12 U.S.C. 1702-1715z-21; 42 U.S.C. 3535(d).

0
32. In Sec.  200.926, add paragraph (a)(3) to read as follows:


Sec.  200.926  Minimum property standards for one and two family 
dwellings.

    (a) * * *
    (3) Applicability of standards to substantial improvement. The 
standards in Sec.  200.926d(c)(4)(i)-(iii) are also applicable to 
structures that are approved for insurance or other benefits in 
connection with substantial improvement, as defined in Sec.  
55.2(b)(12) of this title.
* * * * *
0
33. In Sec.  200.926d, revise paragraphs (c)(4)(i) through (iii), 
remove paragraph (c)(4)(iv), and redesignate paragraphs (c)(4)(v) and 
(c)(4)(vi) as paragraphs (c)(4)(iv) and (c)(4)(v), respectively. The 
revisions read as follows:


Sec.  200.926d  Construction requirements.

* * * * *
    (c) * * *
    (4) Drainage and flood hazard exposure--
    (i) Residential structures located in Special Flood Hazard Areas. 
The elevation of the lowest floor (including basements and other 
permanent enclosures) shall be at least two feet above the base flood 
elevation (see 24 CFR 55.8(b) for appropriate data sources).
    (ii) Residential structures located in FEMA-designated ``coastal 
high hazard areas''.
    Where FEMA has determined the base flood level without establishing 
stillwater elevations, the bottom of the lowest structural member of 
the lowest floor (excluding pilings and columns) and its horizontal 
supports shall be at least two feet above the base flood elevation.
    (iii) (A) In all cases in which a Direct Endorsement (DE) mortgagee 
or a Lender Insurance (LI) mortgagee seeks to insure a mortgage on a 
one- to four-family dwelling that is newly constructed or which 
undergoes a substantial improvement, as defined in Sec.  55.2(b)(12) of 
this title (including a manufactured home that is newly erected or 
undergoes a substantial improvement) that was processed by the DE or LI 
mortgagee, the DE or LI mortgagee must determine whether the property 
improvements (dwelling and related structures/equipment essential to 
the value of the property and subject to flood damage) are located on a 
site that is within a Special Flood Hazard Area, as designated on maps 
of the Federal Emergency Management Agency. If so, the DE mortgagee, 
before submitting the application for insurance to HUD, or the LI 
mortgagee, before submitting all the required data regarding the 
mortgage to HUD, must obtain:
    (1) A final Letter of Map Amendment (LOMA);
    (2) A final Letter of Map Revision (LOMR); or
    (3) A signed Elevation Certificate documenting that the lowest 
floor (including basements and other permanent enclosures) of the 
property improvements is at least two feet above the base flood 
elevation as determined by FEMA's best available information.
    (B) Under the DE program, these mortgages are not eligible for 
insurance unless the DE mortgagee submits the LOMA, LOMR, or Elevation 
Certificate to HUD with the mortgagee's request for endorsement.
    (iv) Streets. Streets must be usable during runoff equivalent to a 
10-year return frequency. Where drainage outfall is inadequate to 
prevent runoff equivalent to a 10-year return frequency from ponding 
over 6 inches deep, streets must be made passable for commonly used 
emergency vehicles during runoff equivalent to a 25-year return 
frequency, except where an alternative access street not subject to 
such ponding is available.
    (v) Crawl spaces. Crawl spaces must not pond water or be subject to 
prolonged dampness.
* * * * *

Adrianne Todman,
Deputy Secretary.
[FR Doc. 2023-05699 Filed 3-23-23; 8:45 am]
BILLING CODE 4210-67-P