Part 1940 general subpart g environmental Program




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(10-19-88) SPECIAL ?N
(7) Coastal Zone Management Act - Section 307(c)(l) and (2), 16 U.S.C. 1456
(8) Farmland Protection Policy Act, Subtitle I, Public Law 97-98
(9) Coastal Barrier Resources Act, Public Law 97-348
(10) Executive Order 11593, Protection and Enhancement of the Cultural Environment (See Subpart F of Part 1901 of this chapter for more specific implementation procedures.)
(11) Executive Order 11514, Protection and Enhancement of Environmental Quality
(12) Executive Order 11988, Floodplain Management
(13) Executive Order 11990, Protection of Wetlands
(14) Title 7, Part lb and lc, Code of Federal Regulations, Department of Agriculture's National Environmental Policy Act; Final Policies and Procedures
(15) Title 7, Part 3100, Code of Federal Regulations, Department of Agriculture's Enhancement, Protection, and Management of the Cultural Environment (See Subpart F of Part 1901 of this chapter for more specific implementation procedures.)
(16) Title 7, Part 658, Code of Federal Regulations, Department of Agriculture, Soil Conservation Service, Farmland Protection Policy
(17) Title 7, Part 12, Code of Federal Regulations, Highly Erodible Land and Wetland Conservation.
(18) Departmental Regulation 9500-3, Land Use Policy (See Exhibit A of this subpart.)
(19) Departmental Regulation 9500-4, Fish and Wildlife Policy
(d) The primary objectives of this subpart are for the Agency to make better decisions by taking into account potential environmental impacts of proposed projects and by working with FmHA applicants, other Federal agencies, Indian tribes, State and local governments, and interested citizens and organizations in order to formulate actions that advance the program goals in a manner that will protect, enhance, and restore environmental quality. To accomplish these objectives, the identification of potentially significant impacts on the human environment is mandated to occur early in the Agency's planning and decisionmaking processes. Important decision points are identified. The completion of the environmental review process is coordinated with

these decision points, and this review must be completed prior to the Agency's first major decision on whether or not to participate in the proposal. This early availability of the results of the environmental review process is intended to ensure that Agency decisions are based on an understanding of their environmental consequence, as well as the consequences of alternative courses of action.


(e) Reducing delays, duplication of effort, and superfluous analyses are provided for in this subpart. FmHA environmental documents are to be supported by accurate analyses and will concentrate on the issues that are timely and relevant to the action in question, rather than amassing needless detail. Such documents and their preparation and review will be coordinated with other Federal or State agencies jointly participating in proposed actions or related actions, in order to avoid duplication of effort, and to achieve a coordinated and timely response.
(f) Public involvement is desirable, and to facilitate public involvement, environmental documents will be available to interested citizens as early in the decisionmaking process as possible and before decisions are made. Provisions are included for citizens or interested parties to express their views and any concerns.
(g) The FmHA officials responsible for the environmental review process are identified.
(h) The FmHA actions covered by this subpart include (1) financial assistance to include grants, loans, and guarantees, (2) subdivision approvals, (3) the management, leasing and sale of inventory property, and (4) other major federal actions such as proposals for legislation and the issuance of regulations.
§1940.302 Definitions. Following is a list of definitions that apply to the implementation of this subpart. Please note that §1940.301(b) of this subpart refers to the Council on Environmental Quality's Regulations for Implementing the Procedural Provisions of the National Environmental Policy Act, 40 CFR Parts 1500-1508. Consequently, the definitions contained in Part 1508 of the Council's regulations apply to this subpart, as well as those listed below.
(a) Emergency circumstance. One involving an immediate or imminent danger to public health or safety.
(b) Environmental review documents. The documents required by this subpart for the purpose of documenting FmHA's compliance with the environmental laws and regulations applicable to the FmHA actions covered in this subpart. These documents include (1) Form RD 194022, "Environmental Checklist for Categorical Exclusions," (2) Form RD 1940-21, "Environmental Assessment for Class I Action," (3)
Environmental Assessment for Class II Actions (Exhibit H of this subpart), and (4) Environmental Impact Statements (EIS).
(c) Flood or flooding. A general and temporary condition of partial or complete inundation of land areas, from the overflow of inland and/or tidal waters, and/or the rapid accumulation or runoff of surface waters from any source. Two important classifications of floods are as follows.
(1) A one-percent chance flood or base flood - A flood of a magnitude that occurs once every 100 years on the average. Within any one-year period there is one chance in 100 of the occurrence of such a flood. Most importantly, however, the cumulative risk of flooding increases with time. Statistically, there is about one chance in five that a flood of this magnitude will occur within a 20-year period, the length of time commonly defined as the useful life of a facility. Over a 30-year period, the life of a typical mortgage, the probability of such a flood occurring increases to greater than one chance in four.
(2) A 0.2-percent chance flood - A flood of a magnitude that occurs once every 500 years on the average. (Within any one-year period there is one chance in 500 of the occurrence of such a flood.) As with the one-percent chance flood, the cumulative risk of this flood occurring also increases with time.
(d) Floodplains. Lowland and relatively flat areas adjoining inland and coastal waters, including flood-prone areas of offshore islands. At a minimum, floodplains consist of those areas subject to a one percent or greater chance of flooding in any given year. The term floodplain will be taken to mean the base floodplain, unless the action involves a critical action, in which case the critical action floodplain is the minimum floodplain of concern.
(1) Base floodplain (or 100-year floodplain) - The area subject to inundation from a flood of a magnitude that occurs once every 100 years on the average (the flood having a one-percent chance of being equalled or exceeded in any given year).
(2) Critical action floodplain (or 500-year floodplain) - The area subject to inundation from a flood of a magnitude that occurs once every 500 years on the average (the flood having 0.2-percent chance of being equalled or exceeded in any given year).
(e) Indirect impacts. Those reasonably foreseeable environmental impacts that result from the additional public facility, residential, commercial, or industrial development or growth that a federally financed project may cause, induce or accommodate. Consequently, indirect impacts often occur later in time than the construction of the Federal project and can be removed in distance from the construction

site. For example, a water transmission line may be designed to serve additional residential development. The environmental impacts of that residential development represent an indirect impact of the federally funded water line. Those indirect impacts which deserve the greatest consideration include changes in the patterns of land use, population density or growth rate, and the corresponding changes to air and water quality and other natural systems.


(f) Mitigation measure. A measure(s) included in a project or application for the purpose of avoiding, minimizing, reducing or rectifying identified, adverse environmental impacts. Examples of such measures include:
(1) the deletion, relocation, redesign or other modifications of the project's elements;
(2) the dedication to open space of environmentally sensitive areas of the project site, which would otherwise be adversely affected by the action or its indirect impacts;
(3) soil erosion and sedimentation plans to control runoff during land-disturbing activities;
(4) the establishment of vegetative buffer zones between project sites and adjacent land uses;
(5) protective measures recommended by environmental and conservation agencies having jurisdiction or special expertise regarding the project's impacts;
(6) storm water management plans to control potential downstream flooding effects that would result from a project;
(7) zoning; and
(8) reuse of existing facilities as opposed to new construction.
(g) No-action alternative. The alternative of not approving an application for financial assistance, a subdivision feasibility analysis, or an Agency proposal.
(h) Practicable alternative. An alternative that is capable of attainment within the confines of relevant constraints. The test of practicability, therefore, depends upon the particulars of the situation under consideration and those constraints imposed by environmental, economic, legal, social and technological parameters. This test, however, is not limited by the temporary unavailability of sufficient financial resources to implement an alternative. That is, alternatives cannot be rejected solely on the basis of moderately increased costs. The range of alternatives that must be analyzed to determine if a practicable alternative exists includes the following three categories of alternatives:
(1) Alternative project sites or designs,
(2) Alternative projects with similar benefits as the proposed action, and
(3) The no-action alternative.
(i) Preparer of Environmental Review Documents. The FmHA official who is responsible for reviewing the potential environmental impacts of the proposed action and for completing the appropriate environmental review document. Under the circumstances indicated, the following Agency positions and divisions will act as the preparer of the environmental review documents covered by this subpart.
(1) County Office - When the approval official for the action under review is located at the County Office level, that official will prepare, as required, Environmental Checklist for Categorical Exclusions and Class I and Class II assessments.
(2) District Office - When the approval official for the action under review is located at the District Office level, that official will prepare, as required, Environmental Checklist for Categorical Exclusions and Class I and Class II assessments or may delegate this responsibility to either
(i) the District Office staff member having primary responsibility for assembling the associated preapplication, application or other case materials, analyzing the materials and developing recommendations for the approval official, or
(ii) a County Office staff member having the same responsibilities as the District Office member, if the action is initiated at the County Office level.
(3) State Office Program Chief - For actions approved within the State Office, the Chief will prepare, as required, Environmental Checklist for Categorical Exclusions and Class I and II assessments or may delegate this responsibility to either
(i) the appropriate State Office Loan Specialist, if not the State Environmental Coordinator (SEC),
(ii) an architect or engineer on the Chief's staff who is not the SEC, or
(iii) a District or County Office staff member located within the office in which the action is initiated and having the responsibilities outlined in paragraph (i)(2)(i) of this section.
(4) State Environmental Coordinator - EIS's for actions within the approval authority of County Supervisors, District Directors, and State Office officials.
(5) Assistant Administrators for Programs - Checklists, assessments, and EIS's for all actions initiated within their program office.
(6) Program Support Staff - Checklists, assessments, and EIS's that the Deputy Administrator for Program Operations requests be done.
(j) Water resource project. Includes any type of construction which would result in either impacts on water quality and the beneficial uses that water quality criteria are designed to protect or any change in the free-flowing characteristics of a particular river or stream to include physical, chemical, and biological characteristics of the waterway. This definition encompasses construction projects within and along the banks of rivers or streams, as well as projects involving withdrawals from, and discharges into such rivers or streams. Projects which require Corps of Engineers dredge and fill permits are also water resource projects.
§1940.303 General policy.
(a) FmHA will consider environmental quality as equal with economic, social, and other relevant factors in program development and decisionmaking processes.
(b) In assessing the potential environmental impacts of its actions, FmHA will consult early with appropriate Federal, State, and local agencies and other organizations to provide decision-makers with both the technical and human aspects of environmental planning.
(c) When adverse environmental impacts are identified, either direct or indirect, an examination will be made of alternative courses of action, including their potential environmental impacts. The objective of the environmental review will be to develop a feasible alternative with the least adverse environmental impact. The alternative of not proceeding with the proposal will also be considered particularly with respect to the need for the proposal.
(d) If no feasible alternative exists, including the no-action alternative, measures to mitigate the identified adverse environmental impacts will be included in the proposal.

(e) The performance of environmental reviews and the consideration of alternatives will be initiated as early as possible in the FmHA application review process so that the Agency will be in the most flexible and objective position to deal with these considerations.


§1940.304 Special policy.
(a) Land use.
(1) FmHA recognizes that its specific mission of assisting rural areas, composed of farms and rural towns, goes hand-in-hand with protecting the environmental resources upon which these systems are dependent. Basic resources necessary to both farm and rural settlements include important farmlands and forestlands, prime rangelands, wetlands, and floodplains. The definitions of these areas are contained in the Appendix to Departmental Regulation 9500-3, Land Use Policy, which is included as Exhibit A of this subpart. For assistance in locating and defining floodplains and wetlands, the locations and telephone numbers of the Federal Emergency Management Administration's regional offices have been included as Exhibit J of this subpart, and similar information for the U.S. Fish and Wildlife Service's Wetland Coordinators has been included as Exhibit K of this subpart. Given the importance of these resources, as emphasized in the Departmental Regulation, Executive Order 11988, "Floodplain Management," and Executive Order 11990, "Protection of Wetlands," it is FmHA's policy not to approve or fund any proposals that, as a result of their identifiable impacts, direct or indirect, would lead to or accommodate either the conversion of these land uses or encroachment upon them. The only exception to this policy is if the approving official determines that
(i) there is no practicable alternative to the proposed action,
(ii) the proposal conforms to the planning criteria identified in paragraph (a)(2) of this section, and
(iii) the proposal includes all practicable measures for reducing the adverse impacts and the amount of conversion/encroachment.
(A) For Farmer Program loans and guarantees, and loans to Indian Tribes and Tribal Corporations, Exhibit M of this subpart imposes additional and more restrictive requirements regarding wetland and highly erodible land conservation.

(B) Unless otherwise exempted by the provisions of Exhibit M, the proceeds of any Farmer Program loan or loan to an Indian Tribe or Tribal Corporation made or guaranteed by FmHA cannot be used


(1) for a purpose that will contribute to excessive erosion of highly erodible land (as defined in Exhibit M) or
(2) for a purpose that will contribute to conversion of wetlands (as defined in Exhibit M) to produce an agricultural commodity.
(2) It is also recognized that unless carefully reviewed, some proposals designed to serve the needs of rural communities can adversely affect the existing economic base and settlement patterns of the community, as well as create development pressures on land and environmental resources essential to farm economies. An example of such a proposal might be the extension of utilities and other types of infrastructure beyond a community's existing settlement pattern and into important farmlands for the purpose of commercial or residential expansion, even though there is available space within the existing settlement pattern for such expansion. Not only may the loss of important farmlands unnecessarily result, but the community may be faced with the economic costs of providing public services to outlying areas, as well as the deterioration of its central business or commercial area; the latter may not be able to compete with the newer, outlying commercial establishments. These results are undesirable, and to avoid their occurrence, projects designed to meet rural community needs (i.e., residential, industrial, commercial, and public facilities) will not be approved unless the following conditions are met.
(i) The project is planned and sited in a manner consistent with the policies of this section, the Farmland Protection Policy Act, and Departmental Regulation 9500-3 (Exhibit A of this subpart).
(ii) The project is not inconsistent with an existing comprehensive and enforceable plan that guides growth and reflects a realistic strategy for protecting natural resources, and the project is compatible, to the extent practicable, with State, unit of local government, and private programs and policies to protect farmland. (If no such plan or policies exist, there is no FmHA requirement that they either be prepared and adopted, as further specified in paragraph (a)(3) of this section.)
(iii) The project will encourage long-term, economically viable public investment by fostering or promoting development patterns that ensure compact community development, that is, development that is limited to serving existing settlement patterns or is located in existing settlement patterns, e.g., the rehabilitation and renovation of existing structures, systems and neighborhoods; infilling of development; the provision of a range of moderate-to-high residential densities appropriate to local and regional needs. When these development patterns or types are not practicable, the development must be contiguous with the existing settlement pattern and provide for a range of moderate-to-high residential densities appropriate to local and regional needs. It is recognized that some FmHA Community Programs projects are designed to serve rural residents, such as rural water and waste disposal systems and, therefore, cannot be limited in service area to those areas contiguous with existing settlement patterns. These types of projects will be designed to primarily serve existing structures and rural residents in noncontiguous areas. Any additional capacity within the system will be limited to meet reasonable growth needs, and, to the extent practicable, be designed to meet such needs within existing settlements and areas contiguous to them.
(3) The conditions specified in paragraph (a)(2) of this section should not be construed as advocating excessive densities, congestion, or loss of open space amenities within rural communities. Desirable living conditions can be obtained under these objectives, along with economic and social benefits for the community and the surrounding farm operations. Additionally, these conditions should not be construed as requiring localities to develop plans which contain the conditions. In any instance in which these planning conditions or criteria do not exist within the project area, project reviews will not be postponed until the criteria are adopted. Rather, projects will be reviewed and funding decisions made in light of a project's consistency with the contents of this subpart (excluding paragraph (a)(2)(ii) of this section, which would not be applicable).
(b) Endangered species. FmHA will not authorize, fund, or carry out any proposal or project that is likely to
(1) jeopardize the continued existence of any plant or wildlife species listed by the Secretary of Interior or Commerce as endangered or threatened; or
(2) destroy or adversely modify the habitats of listed species when such habitats have been determined critical to the species' existence by the Secretary of Interior or Commerce, unless FmHA has been granted an exemption for such proposal by the Endangered Species Committee pursuant to paragraph (h) of Section 7 of the Endangered Species Act.
(c) Wild and scenic rivers. FmHA will not provide financial assistance or plan approval for any water resource project that would have a direct and adverse effect on the values for which a river has been either included in the National Wild and Scenic Rivers System or is designated for potential addition. Additionally, FmHA will not approve or assist developments (commercial, industrial, residential, farming or community facilities) located below or above a wild, scenic or recreational river area, or on any stream tributary thereto which will invade the area or unreasonably diminish the scenic, recreational, and fish and wildlife values present in the area.
(d) Historic and cultural properties. As part of the environmental review process, FmHA will identify any properties that are listed in, or may be eligible for, listing in the National Register of Historic Places and are located within the project's area of potential environmental impacts. Consultations will be undertaken with State Historic Preservation Officers and the Advisory Council on Historic Preservation, through the implementation of Subpart F of Part 1901 of this chapter, in order to determine the most appropriate course of action for protecting such identified properties or mitigating potential adverse impacts to them.
(e) Coastal barriers. Under the requirements of the Coastal Barrier Resources Act, FmHA will not provide financial assistance for any activity to be located within the Coastal Barrier Resources System unless
(1) such activity meets the criteria for an exception, as defined in Section 6 of the Act, and
(2) consultation regarding the activity has been completed with the Secretary of the Interior.
(f) Water and energy conservation. FmHA will encourage the conservation of water and energy in the development of its programs and policies and will encourage applicants to incorporate all economically feasible water and energy-saving features and designs within their proposals.
(g) Intergovernmental initiatives on important land resources. On a broader scale, FmHA will advocate, in cooperation with other USDA agencies (through the USDA State-level committee system), the retention of important farmlands and forestlands, prime rangeland, wetlands and floodplains whenever proposed conversions to other uses

(1) are caused or encouraged by actions or programs of a Federal Agency, or


(2) require licensing or approval by a Federal Agency, unless other needs clearly override the benefits derived from retention of such lands.
(h) Water quality. FmHA will not provide financial assistance to any activity that would either impair a State water quality standard, including designated and/or existing beneficial uses that water quality criteria are designed to protect, or that would not meet antidegradation requirements.
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