Proposed Changes To FTA FHA Categorical Exemptions

The Federal Highway Administration (FHA) and Federal Transit Administration (FTA) have published a Notice of proposed rulemaking (NPRM) which proposes to amend some Categorical Exemptions the agencies use to comply with the National Environmental Policy Act (NEPA). The NPRM provides interested parties with the opportunity to comment on proposed changes to the Federal Highway Administration (FHWA) and the Federal Transit Administration's (FTA) joint procedures that implement the National Environmental Policy Act (NEPA). Comments must be received on or before April 29, 2013.

The revisions are in response to the Moving Ahead for Progress in the 21st Century Act. The agencies propos to add new categorical exclusions for projects within an existing operational right-of-way and projects receiving limited Federal funding. Funding thresholds being proposed are projects receiving less than $5,000,000 of Federal funds; or with a total estimated cost less than $30,000,000 and Federal funds comprising less than 15% of the total estimated project cost.

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Changes To Environmental Review For Federal Transit Administration - Federal Highway Administration

Federal Transit Administration (FTA), Federal Highway Administration (FHWA) have published a final rule revising some of their Environmental review and Related Procedures. This final rule makes revisions to the joint FTA and FHWA regulations that implement the National Environmental Policy Act (NEPA). The final rule is effective on February 7, 2013

FTA and FHWA published a Notice of Proposed Rulemaking (NPRM) on March 15, 2012. In the NPRM, FTA proposed: (1) The creation of ten new categorical exclusions (CEs) to be located in a newly proposed section of the regulation at 23 CFR 771.118; (2) the expansion of public involvement methods to include electronic means; (3) the addition of language on early scoping into the regulations; (4) a modification to the list of project types that normally result in the preparation of an Environmental Impact Statement (EIS); and (5) the inclusion of an FTA review role in contracting for Environmental Assessment (EA) and EIS projects. The comment period closed on May 14, 2012.

Of the five major changes FTA and the FHWA included in the March 2012 NPRM, four are being carried forward in this final rule: (1) The creation of ten new CEs to be located in a newly proposed section of the regulation at 23 CFR 771.118; (2) the expansion of public involvement methods to include electronic means; (3) the addition of language on early scoping into the regulations; and (4) a modification to the list of project types that normally result in the preparation of an EIS. FTA intends that the preamble language contained in this final rule be used as guidance when applying the changes made by this final rule.

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Categorical Exclusions for Offshore Drilling Restricted

The Department of the Interior and Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) announced that the department will restrict its use of categorical exclusions for offshore oil and gas development to activities involving limited environmental risk, while it undertakes a comprehensive review of its National Environmental Protection Act (NEPA) process and the use of categorical exclusions for exploration and drilling on the Outer Continental Shelf.

Department of the Interior intends to conduct a new environmental analysis in the Gulf of Mexico that will help provide information to guide future leasing and development decisions. BOEM intents to complete a supplemental environmental impact statement for the Gulf.

The announcements follow the release of the Council on Environmental Quality’s (CEQ) report on the former Minerals Management Service’s NEPA program. The report was done in close consultation with Interior and BOEM which replaced the Minerals Management Service.

BOEM will issue a Federal Register notice announcing a formal process for the comprehensive review and evaluation of its use of categorical exclusions in relation to offshore oil and gas exploration and drilling activities. While this review is underway, BOEM will be using categorical exclusions on a more limited basis. For actions that potentially involve more significant environmental risk, Department of Interior officials intend to subject more decisions to environmental assessments.

When the review is completed, BOEM will announce a new approach to NEPA compliance that takes into account the joint recommendations included in CEQ‘s report, statutory and/or regulatory constraints, and other appropriate factors. This is consistent with the Council’s regulations directing all federal agencies to periodically review their NEPA policies and procedures.

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HUD Section 50 Section 58 Environmental Review & Environmental Assessment

The U.S. Department of Housing and Urban Development (HUD) requires environmental reviews for housing projects to be completed prior to approval of financial assistance. The objective of the review process is to ensure that due diligence has been undertaken in identifying potential impacts, including both environmental and non-environmental impacts, associated with projects that use HUD funds. An Environmental Review required by HUD is not equivalent to a Phase I Environmental Site Assessment.

The HUD Environmental Review process is driven by two regulations: 24 CFR Part 50 and 24 CFR Part 58. Part 50 pertains to the Department of Housing and Urban Development and those entities that have legal responsibilities to the Secretary of the Interior. In most cases this is HUD itself and state/city housing authorities. Part 58 pertains to those entities that do not have legal responsibilities to the Secretary (e.g., community housing and “faith-based” organizations).

The level or extent of the HUD Environmental Review is dependant on the type of proposed work, the number of units, or a percentage of total area can be a threshold. Under both Part 50 and Part 58, exemptions, categorical exclusions, documented categorical exclusions exist.

Caltha LLP provides expert consulting services to public sector and non-profit sector clients around the county to address HUD Environmental Review and HUD Environmental Assessment requirements.

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CEQ Guidance on NEPA Requirements for Climate Change

The Council on Environmental Quality (CEQ), has issued three draft guidance documents related to the implementation of the National Environmental Policy Act (NEPA),. The new guidance, issued in draft for public comment, directs how federal agencies are to:

• Consider the effects of climate change and greenhouse gas emissions (GHGs) in agency decision-making;
• Use mitigation to reduce or avoid impacts, and monitoring their effectiveness; and
• Establish and apply categorical exclusions.

Public comments on the proposed GHG and mitigation guidance documents will be accepted for 90 days after they are printed in the Federal Register, and comments on the categorical exclusion guidance will be accepted for 45 days.

NEPA requires federal agencies to publicly disclose and consider the environmental consequences of their actions and of private actions requiring federal permits or approvals. It is a process-oriented statute and is not prescriptive in nature. NEPA does not mandate specific environmental results and grants federal agencies broad discretion to determine the extent of environmental protection required for proposed actions.

In the draft GHG guidance, CEQ proposes a framework on when and how to evaluate GHG emissions, and how to evaluate the effect of climate change on the project. The GHG guidance indicates that as part of the initial scoping process, agencies should determine whether a project requiring federal approval will result in “meaningful” GHG emissions, and suggests that emissions greater than 25,000 metric tons may meet this test. Emissions above this level would warrant at least some qualitative or quantitative discussion in NEPA documents.

The GHG guidance also recognizes that there are no existing federal protocols for estimating emissions associated with land use and land management decisions. It also recognizes that determining the reasonably foreseeable impacts of land management decisions on GHG emissions may be difficult.

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Final Rule on NRCS Categorical Exclusions Under NEPA

The Natural Resources Conservation Service (NRCS) published an interim final rule on July 13, 2009, that identified additional categorical exclusions, which are actions that NRCS has determined do not individually or cumulatively have a significant effect on the human environment. Therefore, these actions should not require preparation of an environmental assessment (EA) or environmental impact statement (EIS) under the National Environmental Policy Act (NEPA).

The final rule, effective February 10, 2010, makes final the provisions set forth in the interim final rule. NRCS' categorical exclusions encompass actions that promote restoration and conservation activities related to past natural or human induced damage, or alteration of floodplains and watershed areas. For projects being funded under the American Recovery and Reinvestment Act of 2009 (ARRA), NRCS believes the final rule will assist the Service in meeting mandates set forth in ARRA for undertaking actions in the most expeditious manner and in compliance with NEPA.

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FTA Categorical Exclusion - State Environmental Review

The Federal Transit Administration (FTA) has developed specific categories for environmental review in compliance with NEPA. For certain types of projects, FTA may require project proposers to complete sufficient environmental analysis such that FTA can determine that the proposed project meets the criteria for a Categorical Exclusion (CE) under 27 CFR 771.117(d). By meeting these criteria, FTA will meet Categorical Exclusion criteria under NEPA (40 CFR 1508.4), and ultimately neither the proposer nor FTA will be required to conduct an Environmental Assessment as prescribed under 27 CFR 771.119. FTA could then take actions, including providing project funding.

In States which have their own State environmental review requirements, environmental review requirements may apply, even if a project meets the requirements for an FTA Categorical Exclusion.

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Housing & Urban Development Environmental Review

For a single family home that is being demolished and rebuilt, what type of environmental review will be required under Neighborhood Stabilization Program?

According to the Housing & Urban Development (HUD) , the level of environmental review required depends upon the program design and project description. The responsible entity needs to consider the use of the categorical exclusion:

§58.35 Categorical exclusions.
Categorical exclusion refers to a category of activities for which no environmental impact statement or environmental assessment and finding of no significant impact under NEPA is required, except in extraordinary circumstances (see §58.2(a)(3)) in which a normally excluded activity may have a significant impact. Compliance with the other applicable Federal environmental laws and authorities listed in §58.5 is required for any categorical exclusion listed in paragraph (a) of this section.
(a) Categorical exclusions subject to §58.5. The following activities are categorically excluded under NEPA, but may be subject to review under authorities listed in §58.5:
(4)(i) An individual action on up to four dwelling units where there is a maximum of four units on any one site. The units can be four one-unit buildings or one four-unit building or any combination in between; or
(ii) An individual action on a project of five or more housing units developed on scattered sites when the sites are more than 2,000 feet apart and there are not more than four housing units on any one site.
(iii) Paragraphs (a)(4)(i) and (ii) of this section do not apply to rehabilitation of a building for residential use (with one to four units) (see paragraph (a)(3)(i) of this section).

“Individual action” as used in §58.35(a) refers to an individual approval action about the particular dwelling unit(s) and may include new construction, demolition, and/or reconstruction (demolition and new construction). However, note that this categorical exclusion does not apply to rehabilitation of a building for residential use.

A responsible entity (RE) may apply the categorical exclusion at §58.35(a) on an individual application basis, allowing the RE to use this categorical exclusion when an individual applicant is submitting an application for construction, demolition and/or reconstruction of dwelling units. If the RE designs a program where individual applicants will be submitting applications for new construction of up to four dwelling units, then each individual application may be considered to be categorically excluded per §58.35(a)(4)(i). If the RE designs a program where individual applicants will be submitting applications for a project of five more housing units on scattered sites when the sites are more than 2,000 feet apart and there are not more than four housing units on any one site, then each individual application may be considered to be categorically excluded per §58.35(a)(4)(ii).

If the Neighborhood Stabilization Program is clearly designed and intended to develop a specific block/neighborhood or other limited geographic area, then an environmental assessment for the program/area will be required.

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Does Every Federal Agency Action Require Environmental Review?

Yes and no; because NEPA is a procedural law, CEQ requires each federal agency to write their own NEPA compliance regulations to fit their particular programs. However, every Federal agency is subject to NEPA. Most agencies have established categories of actions that do not require environmental review, or require a streamlined environmental review:

Categorical Exclusions (CE) – most agencies will have promulgated a list of types of actions that do not require any environmental review; by their nature, these types of actions have no significant environmental impact.

Documented Categorical Exclusions (dCE) – most agencies will also promulgate a list of actions that require a streamlined environmental review; often, the scope these environmental reviews will be directed in the agency’s Categorical Exclusion Environmental Review Checklist.

Caltha LLP provides expert consulting services to public and private sector clients nationwide to address Environmental Review and Environmental Impact Assessment.

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