United States Office of Research and EPA/220/B-92/011
Environmental Protection Development March 1992
Agency Washington DC 20460
xvEPA Guidance for EPA
Regional Oversight of
State National
Environmental Policy
Act (NEPA) Delegation
-------
GUIDANCE FOR EPA REGIONAL OVERSIGHT OF STATE
NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) DELEGATION
I. INTRODUCTION
This document is intended for use by Environmental Protection Agency (EPA)
regions in overseeing state activities taken to support EPA compliance
with the National Environmental Policy Act (NEPA) where the construction
grants program has been delegated to the state.* It should be viewed as
a companion to the Construction Grants Delegation and Overview Guidance
Manual issued in December 1983 by the Office of Water. All citations to
40 CFR Part 6 refer to the Interim Rule published in the Federal Register
in June 1985.
As of August 1985, EPA has delegated all or part of the construction
grants program to 49 states and Puerto Rico. In this process EPA's
emphasis has shifted from project-level decisionmaking to assessing
performance against overall program and management objectives. As part
of this delegation the states assume a larger role in NEPA compliance.
Although EPA still is responsible for issuing environmental assessments/
findings of no significant impact (EAs/FNSIs), categorical exclusions and
environmental impact statements (EISs), delegated states can prepare EA
and FNSI documents and make recommendations to EPA on NEPA actions. EPA
retains primary responsibility for preparation of EISs and may take the
lead for FNSI/EAs on selected projects. The charts attached show the
state/EPA NEPA'roles for delegated states.
This document delineates the fundamental responsibilities of each party
(applicants/grantees, states, and EPA) in the delegated construction
grants NEPA program. It also provides guidance and criteria for the EPA
regions to use in evaluating delegated state programs.
II. DELEGATION AGREEMENTS
Delegation agreements are signed by responsible EPA and state officials
and define EPA and state roles under each delegated state construction
grants program. These are usually multi-year agreements, and EPA
reviews state performance annually. Delegation agreements are the
most significant documents for defining the state environmental
review role. In addition, State/EPA Agreements are developed annually
under the Clean Water Act Section 106 grant program. These outline the
environmental goals and objectives to be pursued through the joint efforts
of both agencies. Commitments of resources or activities may be
incorporated in these agreements.
* Although the program is delegated to the state, EPA retains responsibility
for NEPA compliance since EPA issues the grant. The state, however, may
have a significant role in developing the documentation for NEPA compliance.
,, ~ _ . rrz> Printed on Recycled Paper
U.S. Environ-,,, —hcfkm ^
Region 5, Li:,,- -, ., 2 j)
77 West Jackie., ::-.:lvard l
Chicago, IL 6C-5c;-3-:1o '
-------
-2-
The EPA regional administrator is the responsible official for NEPA
decisions. The following NEPA-related duties may be delegated to states
in delegation agreements:
review of grantee suhmittals under EPA requirements for NEPA
compliance as set out in 40 CFR Part 6;
- preparation of recommendations and draft documentation on eligible
categorical exclusions;
- preparation of recommendations and draft documentation on
partitioning environmental reviews;
- preparation of drafts of environmental assessments and drafts of
findings of no significant impact (FNSIs) and recommendations on
these:
preparation of recommendations and draft documentation under applicable
laws described under 40 CFR Part 6 Subpart C (e.g., Endangered Species
Act, etc.);
overview of grantee publication and distribution of notices
pursuant to 40 CFR Part 6; and
- ensuring individual project compliance with grant conditions included
as a result of environmental review.
The final decision-making authority for NEPA actions related to construction
grants rests with the regional administrator and cannot be delegated to
the states. The following functions are covered by this requirement:
- determinations of whether or not a project qualifies for a
categorical exclusion (if an exclusion is granted, the project
does not have to meet any other NEPA requirements);
approvals for partitioning the environmental review process;
- finalizing the scope of an environmental assessment;
- approval and issuance of final environmental assessment;
- determination for and issuance of FNSIs;
- determination and issuance of notices of intent for preparing
an EIS:
scoping, preparation and issuance of draft, final and supplemental
EI Ss;
- preparation and issuance of the Record of Decision (ROD) on an
EIS;
- final decisions under other applicable laws described in Subpart C,
40 CFR Part 6;
- decisions required for utilizing a third party method for preparing
an EIS;
- determining consistency of re-evaluated EISs or other NEPA decisions
for projects awaiting grant funding following elapse of five years
or more; and
- ensuring inclusion of grant conditions developed as a result of the
environmental review process into the Record of Decision (ROD) and
construction grant document, as appropriate.
-------
-3-
The regional administrator is also responsible for oversight of delegated
state environmental review activities and responsibilities, including
oversight of grant conditions included as result of environmental reviews,
The delegation agreement should incorporate the following elements into
the NEPA delegation process:
(1) Annual overviews to be conducted hy EPA in state offices in order to
evaluate the state's compliance with NEPA procedures and requirements:
(2) A provision that revisions to the delegation agreement can be
initiated by either EPA or the state, on an as needed basis. Both
parties must agree to such changes before the formal adoption;
(3) The establishment of specific review points and the development of
checklists to be used in reviews of delegated programs; and
(4) A provision that retraction of the delegation agreement can occur
in the case of clearly unacceptable performance by a state which
shows lack of good faith or capacity to correct identified problems.
Under delegation, the role of the applicant or grantee remains the same.
The applicant/grantee has the primary responsibility for preparing
the facility planning material and Environmental Information Document
(EID) and submitting it for review by the state. The delegated state
agency has the responsibility to provide applicants/grantees with the
latest available construction grants and NEPA guidance and to confer
early with the ajDpl icant/grantee concerning NEPA determinations.
III. ENVIRONMENTAL REVIEW PROCEDURES
Since the final decision on whether a proposed agency action will
significantly affect the environment is still one that EPA must make, the
following approach to environmental review is recommended where states
have been delegated the construction grants program.
In most cases, the state will collect data, analyze the project, consult
with EPA where appropriate, and resolve issues. The state will then prepare
documentation and submit it to EPA along with recommendations for a
decision. EPA will review the documentation, request more information
if necesary, resolve any remaining problems and complete the environmental
review. One approach which can be taken is that a selected number (e.g.
10%) of cases be jointly identified by the region and state where the
state will submit all environmental information related to the project
(including documents and correspondence) to EPA for a "real time"
evaluation. EPA would also participate in selected meetings with the
applicant/grantee. These should be the more sensitive projects, and
should be selected for the ensuing year during the annual overview session
with the state. Another approach which is also appropriate would
involve a rptrosppctive review of individual state actions by the EPA
-------
-4-
regional office. Under this approach, more information would be obtained
on state reviews which took place during the preceeding year, and an
analysis made of the environmental assessment. This would allow a more
detailed review of the state action without the direct EPA presence in an
on-going state grant review. An EPA region may also want to combine both
of these approaches in its evaluation program.
The components of the environmental review process are outlined below.
These are the same whether they are done by EPA or the state.
(1) Consultation: The applicant/grantee is encouraged to consult with
the state/EPA early in project formulation to discuss the potential
eligibility for categorical exclusion, available alternatives,
potential environmental issues, the need for an EIS, etc. In a
delegated program the state will be the primary contact for these
consultations.
(?) Categorical Exclusion: At the request of an applicant/grantee, the
state may review the eligibility of a project for a categorical
exclusion from the remaining substantive environmental review
procedures. The recommendation and documentation supporting the
recommendation should be forwarded to EPA for a determination.
Categorical exclusions must be limited to projects which will clearly
have no significant environmental impact (40 CFR 6.107).
(3) Partitioning: When there are overriding considerations of cost or
impaired program effectiveness, a grant may be awarded for a component
of a wastewater system in advance of completing all NEPA requirements.
In these ca'ses NEPA requirements need to be completed on the approved
project component but not the whole system. The state may recommend
partitioning based on the 40 CFR 6.507 criteria.
(4) Environmental Assessment: This is the official documentation of the
decision to issue a Finding of No Significant Impact (FNSI). The
FNSI can only be issued by the EPA. However, for those states where
the review of the facilities plan and EID has been delegated, the
state may prepare a draft environmental assessment. EPA will make
its determination based on the draft or other appropriate information
and, after review and modification as necessary, will issue it as the
final environmental assessment.
(5) Environmental Impact Statement: The state may recommend that an EIS
be done (or that a FNSI cannot be issued). EPA may also, determine
that an EIS is required, whether or not the state recommends one.
When this determination is made, the EPA is responsible for issuing a
Notice of Intent to prepare an EIS and will have the lead
responsibility in preparing the EIS, whether it is in a delegated
state or not. The state will be involved in providing input and
reviewing EIS outputs.
-------
-5-
IV. EPA's OVERSIGHT AND EVALUATION PROGRAM
For the delegation of the environmental review process to be successful,
the EPA regional office must develop and implement a review and evaluation
program of state activities. The basic elements of such reviews are
identified in the "Agency Policy on Delegation and Oversight: Making the
State-EPA Partnership Work" (April 4, 1984). The activities most
pertinent for NEPA compliance are:
- an EPA/state agreement defining shared NEPA responsibilities
and reporting requirements;
- an annual joint EPA/state planning cycle;
- an annual EPA evaluation of state performance;
- a program for developing policies, guidance and technical
assistance with state input; and
- state evaluations of EPA performance.
To be most effective, the NEPA compliance review should be an integral
part of the total regional overview of the delegated construction grants
program (as set out in 40 CFR 35.3025). Where the EPA regional NEPA
compliance responsibility is not in the same organization as the
construction grants program there is a need to closely coordinate the
review of the delegated state construction grant program. In these cases
it is recommended that a Memorandum of Agreement be developed between the
two organizational units to spell out elements and responsibilities of
the construction grant review, including NEPA compliance activities, with
the goal of an integrated regional office review of all facets of the
delegated program.
Regional evaluation procedures should be delineated in the delegation
agreement. The procedure should provide for at least one on-site
assessment of the state's performance per year. It should provide for
record-keeping by the state and EPA on the number and kind of state
reviews carried out and follow-up actions by EPA. The level of state
staffing and expertise should be evaluated. Primarily, however, it
should focus on the quality of state environmental reviews, and criteria
are included below to address the elements of a qualitative review. A
review of this kind can be effectively carried out by auditing selected
actions in detail, rather than amassing large amounts of data on all
actions. In implementing this approach it is recommended that a sample
of state actions (categorical exclusions, EAs, FNSIs, recommendations) be
developed which will be representative of the over-all quality of the
program. Where data on a larger number of state actions is available
this can be summarized and various elements of the state program can be
evaluated in order to supplement the detailed audits of selected actions.
Some regions have found that it is more effective to review one or
more functional areas separately. This approach should be considered,
although it is critical that an integrated assessment of all elements
of the state plan ultimately be produced during the year.
The broadest elements of regional oversight reviews should include, at
a minimum, evaluation of:
-------
-6-
- conformance with established state and federal
environmental review procedures;
the thoroughness of state environmental reviews;
- the extent to which mitigation of adverse impacts
is identified and recommended; and
- the extent to which the state is ensuring that
mitigation measures are implemented by the grantee
The key EPA objective is to develop a good working relationship with
the states based on a mutual understanding of the intent of NEPA,
which is that environmental information should be an integral part of
the decision-making process rather than something to be considered
after a decision is made.
More detailed evaluation elements are outlined below. These should be
seen as the minimal questions which should be raised in looking at
state actions. Each region will, of course, have to tailor an evaluation
which is most suitable for each of its states.
V. QUESTIONS TO BE INCLUDED IN A STATE PROGRAM EVALUATION
Compliance with National Environmental Policy Act (NEPA) Procedures
Are state environmental review procedures actually affording adequate
protection of the environment before, during and after construction of
wastewater facilities? Are any changes appropriate? Do the reviews
identify the significant environmental issues and deemphasize insignificant
ones? Do the state recommendations on Categorical Exclusions, Environmental
Assessments/FNSIs, and EISs conform with requirements of 40 CFR Part 6?
Are the alternatives developed realistic and well considered? Are
alternatives considered to address all of the adverse environmental
impacts identified? Are "worst case" impacts and the liklihood of occurence
identified, along with mitigation measures? Do the documents which the
state has prepared address all of the procedural considerations required
under NEPA regulations, including correct format and applicable public
information activities.
Air Quality
Have projects been evaluated for compatibility with State Implementation
Plans? If incineration is being proposed for sludge disposal has this
been evaluated for compabitibility with the SIP, and possible impact on
human health and the environment? Have the indirect air quality impacts
associated with development been evaluated? Has the possible volatilization
of harmful pollutants been considered?
Water Quality
Were plants reviewed for all applicable requirements of the Clean Water Ac*"
(water quality standards, Areawide Waste Treatment Plans, etc.)? Were
they reviewed for impact on downstream drinking water intakes? Were the
-------
-7-
assumptions on stream capacity appropriate? Did the state consider "worst
case" impacts of failure to operate and maintain the plant properly? Were
the indirect effects on water quality of plant-induced development
considered and was the evaluation realistic?
Wetlands/Floodp!a ins
Does the state environmental review cover both direct and indirect impacts
(including those from project-induced growth) on wetlands and floodplains?
In cases where there are wetlands impacts: does the state cooperate with
EPA and the Army Corps of Engineers in identifying alternatives and
mitigation measures, do EAs contain detailed information on the location,
extent, type and value of impacted wetlands, is a Statement of Findings
developed?
Groundwater Protection
Has the project been reviewed for compatibility with CWA Sec. 208
comprehensive plans for control of pollution from residual wastes,
application of treated wastewater or sludge, underground injection of
wastes and discharge into streams which may contribute to aquifers?
Is it compatible with the EPA groundwater strategy? If out-of-basin
transfer is involved, what effect will it have on groundwater quality
and quantity?
Endangered Species Protection
*
Do state environmental reviews address endangered or threatened species?
Do they correctly identify endangered or threatened species in a project
area? Do they consult with the US Fish and Wildlife Service on these?
Do they address both direct effects and indirect effects of projects on
endangered/threatened species and species habitats? Do they comply with
applicable regulations (50 CFR Part 402) whenever a threatened or
endangered species may suffer adverse harm from a wastewater construction
project?
Wild and Scenic Rivers
Does the state identify river designations in reviewing projects? If
an affected river is designated wild, scenic or recreational, does the
state utilize information from the National Park Service in assessing
impacts on these rivers? Is EPA notified when an adverse impact
is identified7
Historic/Archaeological Resources
Does the state contact the State Historic Preservation Officer (SHPO)
to identify all known historic, archeological and/or cultural
properties in the project area? Does the state incorporate the
historic preservation requirements set out in 36 CFR Part 800 into
its environmental analysis9 Where data are lacking does the state
carry out the necessary survey work through the SHPO or EPA?
-------
-8-
National Natural Landmarks
Does the state environmental review process include whether there are
natural landmarks designated as National Natural Landmarks by the National
Park Service within the project areas? Are alternatives formulated to
have the least harmful impact upon these landmarks?
Important Agricultural Lands
Do project evaluations consider farmland protection, including both the
direct and indirect impacts, and appropriate mitigation measures? If
Environmentally Significant Lands (as defined in 7 CFR Part 657 by USDA)
are impacted, does the state identify them, assess the impacts and
delineate efforts to avoid or mitigate the adverse effects, including
induced development. Does the state coordinate with the State
Conservationist of the Soil Conservation Service to ensure that projects
meet appropriate guidelines?
Coastal Zone Management Act
Where wastewater treatment facilities are to be located in areas defined
as coastal zones does the state environmental review process assure that
they are reviewed for consistency with State Coastal Zone Management
plans? Is adequate consultation made with the state agency responsible
for coastal zone management plans? Do the reviews include an adequate
identification of sensitive coastal areas, review of both direct and
indirect (particularly project-induced growth) and regional impacts?
Coastal Barrier Resources Act
Does the state review proposed projects for compliance with restrictions
on new federal expenditures which have the effect of encouraging
development on undeveloped coastal barriers within the Coastal Barriers
Resources System?
Peer Review Process
Does the state have a peer review process for its environmental review
documents? Does this include review by experts who are knowledgeable
about all of the environmental considerations in the project area? Does
the state have a list of experts which it can access for peer reviews?
Mitigation Measures
Do the evironmental review documents describe the mitigation measures in
the facility plans and do they recommend additional ones when needed?
Are mitigation measures included as grant conditions? Does the stat*
consider mitigation in subsequent project steps? These subsequent project
steps affecting mitigation measures include:
-------
-9-
- plans and specifications;
- grant applications;
value engineering reports;
- plans of operation, including operation and maintenance manual;
- change orders; and
- project performance certification.
Other Considerations
Is the population data used current and accurate? Are the projections
of population growth realistic? Have state and local land use controls
been considered and is the project consistent with them? Have all
of the affected environmentally sensitive areas (wetlanos, tloodplains,
steep slopes, aquifer recharge areas, etc.) been identified, and
potential direct and indirect impacts considered? Have impacts on
recreational and open space areas been consideied, including the
potential for enhancing such areas?
VI. EPA ENVIRONMENTAL REVIEW ASSISTANCE PROGRAM
EPA's regional NEPA compliance staffs have a responsibility under the
Agency's policy on delegation and oversight to assist states in
performing environmental review tasks specified in State/EPA
Agreements. Each EPA Regional NEPA compliance staff office should
develop a comprehensive program of NEPA assistance for the States
with delegated construction grants programs. As a minimum, an assistance
program includes the following:
- Environmental Review Manuals or standard operating procedures
which describe the substantive and procedural aspects of the
environmental review process, including environmental review
required under state law or regulation, for each delegated state
- Training sessions on environmental review activities as needed
and appropriate
The program should also include an effective follow-up effort for
assisting states in correcting problems found through regional evaluations
or which have otherwise come up. It is also necessary that the region
be available to provide assistance on particularly difficult or complex
reviews.
The state's cooperation should be obtained in developing each part of
a regional assistance program.
Environmental Review Manuals
Several regions have already prepared comprehensive guidance manuals
(Environmental Review Manuals) for states to use in performing environmenta'
reviews under delegated construction grants programs. The development of
-------
-10-
such manuals by all regions is encouraged. This can be done by
appropriately modifying manuals which are currently being used. While
each region has discretion as to format, it is recommended that the
manual be organized into topic areas (e.g. NEPA, Endangered Species,
Historic Preservation, etc.) and that each topic area contain two parts:
(1) substantive guidance and (2) reference documents. The manuals should
include the following:
- a discussion of review procedures and key terms;
- the environmental review process with state delegation under
205(g);
- identification of responsibilities for environmental reviews,
EIS candidates, categorical exclusions, partitioning environmental
reviews, assessments, FNSIs, etc.;
- an environmental screening checklist;
- guidance for identifying potential EIS candidates;
- guidance on identifying components for accelerated partitioned
environmental review;
sample formats for environmental assessments, FNSIs, partitioning
decisions, categorical exclusion decisions, and content of
environmental information documents;
- a peer review process; and
- appropriate reference documents (such as: EPA Procedures for
Implementing the National Environmental Policy Act (40 CFR
Part 6), Sec. 40 CFR 35.2113 of the construction grants
regulation, CEO NEPA implementing regulations (40 CFR Parts
1500-1508))
Individual sections should be included in the manual to cover the
substantive requirements and present appropriate references for reviews
of: air quality, water quality, wetlands/floodplains, groundwater,
endangered species, fish and wildlife, wild and scenic rivers,
historical/archaeological resources, prime agricultural lands,
coastal zone management, coastal barrier resources, and public
participation. For each area the guidance should provide an account of
the legislative and regulatory framework and its applicability to the
construction grants program. State requirements should be included as
well. Key contacts within the state, EPA and, where appropriate, other
Federal agencies should be listed. A list of more detailed reference
documents may also be appropriate.
Training Assistance
EPA's policies on delegation and oversight urge that training needs
be identified and pursued which will assist states in carrying out
their obligations under delegation agreements. Generally, training
-------
-11-
needs can be identified from reviews of products submitted by states and
from state requests for training. Key areas for training sessions
include:
the Environmental Review Manuals;
- NEPA requirements;
- specific environmental laws;
unique or fragile environments (coastal areas, small mountain
communities);
coordination among various governmental levels of environmental
review requirements;
techniques for monitoring performance of construction grantees
and applicants; and
"state-of-the-art" environmental assessment techniques.
It is recommended that NEPA compliance training be coordinated with the
regional construction grants program.
-------
NEPA PROCESS UNDER STATE DELEGATION: EISs
Plan submitted
with an environmental
information document (EID)
State and/or
EPA staff
recommend EIS
EPA R.O. issues
Notice of Intent
(to prepare EIS)
& scoping letter
May be comment
period (not req'd.)
Rj. issues
draft EIS
45 day comment
period required
R.O. issues
final EIS
30 day comment
period required
Plan certification
or denial by State
R.O. prepares
Record of Decision
(ROD).*
If EPA does not aree with state approval/denial it may
invoke "overriding federal interest" which withdraws
state delegation for that individual plan.
-------
NEPA PROCESS UNDER STATE DELEGATION
Plan submitted by grantee/
applicant
with an environmental
information document (RID)
State
Environmental
Review
State prepares
draft FNSI/EA
"itate can recommend
catagorical exclusion
(no EA required) to
EPA
EPA staff
reviews State
EA
State revises
EA as needed
EPAstaff or
State can
recommend EIS
EPA RA
signs FNSI/EA
30 day comment
Dr EPA can
issue Notice
of Intent to
prepare EIS*
8
State drafts
responses - EPA
responds to
comments; FNSI
effective or
determination is
made that EIS
required.
Plan approval/disapproval
by state**
* See EIS process diagram attached
**If EPA does not agree with state approval/disapproval
it may invoke "overriding federal interest" which
withdraws state delegation for that individual plan.
£U.S. GOVERNMENT PKINTINC OFFICE: W*2 . 64H-003/40784
------- |