Grant Administration: Section 5.3 Classifying Activities and Conducting the ReviewTo begin the environmental review process, the responsible entity must first determine the
environmental classification of each activity in the project. This section discusses the types of classifications and the steps required for each classification to ensure compliance with the applicable requirements. The environmental regulations at 24 CFR section 58.32 require the responsible entity to “…group together and evaluate as a single project all individual activities which are related geographically or functionally,” whether or not HUD‐ assistance will be used to fund all the project activities or just some of the project activities. This section will focus upon the five environmental classifications that are recognized under the CDBG program:
- Exempt activities;
- Categorically excluded activities not subject to section 58.5;
- Categorically excluded activities subject to section 58.5;
- Activities requiring an environment assessment (EA); or
- Activities requiring an environmental impact statement (EIS).
The level of environmental review will be dictated by whichever project activity that requires the higher level of review. For example, if one activity in a project requires an environmental assessment then the entire project must be assessed at this level of review.
5.3.1. Exempt Activities
Certain activities are by their nature highly unlikely to have any direct impact on the environment. Accordingly, these activities are not subject to most of the procedural requirements of environmental review. Listed below are examples which may be exempt from environmental review. For complete details refer to the environmental regulations at 24 CFR §58.34 (a) (1) through (12).
- Environmental and other studies;
- Information and financial services;
- Administrative and management activities;
- Engineering and design costs;
- Interim assistance (emergency) activities if the assisted activities do not alter environmental conditions and are for temporary or permanent improvements limited to protection, repair or restoration actions necessary only to control or arrest the effects of disasters, or imminent threats to public safety, or those resulting from physical deterioration;
- Public service activities that will not have a physical impact or result in any physical changes;
- Inspections and testing of properties for hazards or defects;
- Purchase of tools or insurance;
- Technical assistance or training;
- Payment of principal and interest on loans made or guaranteed by HUD (does not include the initial project activity – only future year payments of P&I); and
- Any of the categorically excluded activities subject to section 58.5 (as listed in 58.35(a)) provided there are no circumstances which require compliance with any other federal laws and authorities listed at section 58.5 of the regulations. Refer to the section below on categorically excluded activities subject to section 58.5.
NOTE: The activities in this group must use a separate HUD form from all other exempt activities.
If a project is determined to be exempt, the responsible entity is required to document in writing that the project is exempt and meets the conditions for exemption. The responsible entity must complete the form titled “Environmental Review for Activity/Project that is Exempt,” (Attachment 5-1) for all but the last group of exempt activities in the list above. The form must be signed by the ECO and a copy sent to CDFA for review. Attachment 5-1 Exempt Activity
NOTE: The last group of exempt activities in the list above actually is another classification that converts to Exempt. These activities are Categorically Excluded Subject to (CEST) Section 58.5. The responsible entity should use the form discussed in that category below to document the determination that they are exempt.
The RE does not have to complete the Notice of Intent to Request Release of Funds (NOI/RROF) for Exempt activities or CEST that convert to Exempt. The environmental review for Exempt activities is complete.
5.3.2. Categorically Excluded Not Subject to Section 58.5 (CENST) Activities
The following activities, listed at 24 CFR section 58.35(b), have been determined to be categorically excluded from NEPA requirements and are not subject to section 58.5 compliance determinations (CENST). 24 CFR §58.35(b)
- Tenant based rental assistance;
- Supportive services including but not limited to health care, housing services, permanent housing placement, short term payments for rent/mortgage/utility costs, and assistance in gaining access to local, state, and federal government services and services;
- Operating costs including maintenance, security, operation, utilities, furnishings, equipment, supplies, staff training, recruitment, and other incidental costs;
- Economic development activities including but not limited to equipment purchase, inventory financing, interest subsidy, operating expenses and similar costs not associated with construction or expansion of existing operations;
- Activities to assist homebuyers to purchase existing dwelling units or dwelling units under construction such as closing costs, down payment assistance, interest buy downs and similar activities that result in the transfer of title to a property; and
- Affordable housing predevelopment costs with NO physical impact such as legal, consulting, developer and other costs related to obtaining site options, project financing, administrative costs and fees for loan commitments, zoning approvals, and other related activities which do not have a physical impact.
- Approval of supplemental assistance to a project previously approved under Part 58, if the approval was made by the same RE that conducted the environmental review on the original project AND re‐evaluation of the findings is not required under Part 58.47. See the section later in the chapter on re‐evaluation of previously cleared projects for further guidance.
To complete environmental requirements for CENST activities, the responsible entity must make a finding that the activities qualify under that category by completing the form titled Environmental Review for Activity/Project that Categorically Excluded Not Subject to Section 58.5 (see Attachment 5‐2). The form must be signed by the ECO and a copy sent to CDFA for review. Attachment 5-2: Environmental Review for CENST Activity
The RE does not have to complete a Notice of Intent to Request Release of Funds (NOI/RROF). The environmental review for CENST activities is complete.
5.3.3. Categorically Excluded Subject to Section 58.5 (CEST) Activities
The list of categorically excluded activities is found at 24 CFR Part 58.35 of the environmental regulations. While the activities listed in section 58.35(a) are categorically excluded from National Environmental Protection Act (NEPA) requirements, the grantee must nevertheless demonstrate compliance with the laws, authorities and Executive Orders listed in section 58.5. 24 CFR §58.35(a)
The following are categorically excluded activities subject to section 58.5:
- Acquisition, repair, improvement, reconstruction, or rehabilitation of public facilities and improvements (other than buildings) when the facilities and improvements are in place and will be retained in the same use without change in size, or capacity of more than 20 percent.
- Special projects directed toward the removal of material and architectural barriers that restrict the mobility of and accessibility to elderly and disabled persons
- Rehabilitation of buildings and improvements when the following conditions are met:
– For residential properties with one to four units:
– The density is not increased beyond four units, and
– The land use is not changed.- For multi‐family residential buildings (with more than four units):
– Unit density is not changed more than 20 percent;
– The project does not involve changes in land use from residential to non‐residential; and
– The estimated cost of rehabilitation is less than 75 percent of the total estimated replacement cost after rehabilitation.- For non‐residential structures including commercial, industrial and public buildings:
– The facilities and improvements are in place and will not be changed in size or capacity by more than 20 percent; and
– The activity does not involve a change in land use, e.g. from commercial to industrial, from non‐residential to residential, or from one industrial use to another.
- An individual action on up to four‐family dwelling 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;
- 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;
- Acquisition (including leasing) or disposition of or equity loans on an existing structure, or acquisition (including leasing) of vacant land provided that the structure or land acquired, financed, or disposed of will be retained for the same use.
- Combinations of the above activities.
To complete environmental requirements for CEST projects, the responsible entity must take the following steps:
1. Determine whether or not the project is located in or will have an impact on floodplains and/or wetlands.
- It is highly desirable to avoid floodplains and wetlands when undertaking project activities. However, when this cannot be avoided, specific review procedures contained in 24 CFR Part 55 (Floodplain Management and Wetlands Protection) must be completed. Since development in these areas is clearly an environmental issue, the effects of these actions must be clearly articulated in one of the decision processes described in §§ 55.12(a)(3) and 55.20, whichever process is applicable. (See the Projects in Floodplains and Wetlands section.)
- If the project is located in the floodplain or proposes construction in a wetland, the RE must provide written documentation of the decision process in the ERR. See the section, “Projects in Floodplains and Wetlands” later in this chapter for more information.
2. Complete the form Environmental Review for Activity/Project that is Categorically Excluded Subject to (CEST) Section 58.5. (See Attachment 5-3) This form includes the statutory checklist and helps to comply with the other (non‐NEPA) federal laws. Attachment 5-3: Environmental Review for CEST Activity
- Seek a concurrence letter from the New Hampshire Division of Historic Resources, which serves as the State Historic Preservation Office (SHPO), Grantees should submit a Request for Project Review (RPR) Form to describe whether the activity (or activities) have an effect on historic preservation or not. The SHPO has 30 days for comments. Respond to these comments as required and file all correspondence and evidence of response in your ERR. Be sure reliable sources are cited on each line of the checklist. All historic property reviews must be done prior to the responsible entity making a final determination of environmental status. Request for Project Review Form (SHPO)
3. The CEST form in Attachment 5-3 also documents when CEST activities can convert to Exempt status. As described above, the activities converting to Exempt status do not require publishing of the NOI or a RROF to complete the environmental certification. The form must be signed by the ECO and a copy sent to CDFA for review. For activities converting to Exempt status, the environmental review is complete.
4. For those projects that cannot convert to exempt, publish and distribute the Notice of Intent to Request a Release of Funds (NOI/RROF). The Notice informs the public that the grantee will accept written comments on the findings of its ERR and of the grantee’s intention to request release of funds from the state. At least seven (7) calendar days after the date of publication must be allowed for public comment. The notice also says that CDFA will receive objections for at least 15 days following receipt of the grantee’s request for release of funds (Attachment 5‐4). Attachment 5-4: Notice of Intent to Request Release of Funds
5. The NOI/RROF must be published in a daily newspaper of general circulation in the affected community. For example, the Union Leader is such a daily newspaper serving many communities beyond Manchester.
6. The RE must also send a copy of the notice (NOI/RROF) to interested parties (i.e., persons and entities that have commented on the environmental process or that have requested to be notified of environmental activities) and appropriate local/state/federal agencies. See Attachment 5-5 for the list of Environmental Contacts. Attachment 5-5: Environmental Contacts
NOTE: All time periods for notices shall be counted in calendar days. The first day of a time period begins on the day following the publication of the notice. Do NOT count the day the notice is published.
7. After the seven‐day comment period has elapsed and the RE has addressed any comments received, the ECO must submit the following to CDFA:
- Signed CEST form (Attachment 5‐3) including all attachments;
- Publishers Affidavit of the Notice of Intent to Request Release of Funds (NOI/RROF) or “tear sheet” (which can be digital), and;
- Request for Release of Funds and Certification – HUD Form 7015.15 (see Attachment 5-6). Attachment 5-6: Request for Release of Funds HUD Form 7015.15
8. The environmental review of CEST activities is complete. However, activities cannot be undertaken until CDFA issues an authorization of approval. CDFA will issue an Authority to Use Grant Funds – HUD Form 7015.16 (see Attachment 5-7). Attachment 5-7: Authority to Use Grant Funds HUD Form 7015.16
5.3.4. Projects in Floodplains and Wetlands (24 CFR Part 55)
When a project meets one or more of the following criteria, the implementation of a specific decision‐making process is required for compliance with Executive Orders 11988 and 11990 and 24 CFR Part 55:
- The project is in the 100‐year floodplain (Zones A or V mapped by FEMA, or best available information);
- The project is a “critical action” in a 500‐year floodplain. A critical action is any activity where even a slight chance of flooding would be too great, because such flooding might result in loss of life, injury to persons, or damage to property. Critical actions include activities that create, maintain or extend the useful life of those structures or facilities that (1) produce, use or store highly volatile, flammable, explosive, toxic or water‐reactive materials; (2) provide essential and irreplaceable records or utility or emergency services that may become lost or inoperative during flood and storm events; or (3) are likely to contain occupants who may not be sufficiently mobile to avoid loss of life or injury during flood or storm events (e.g., hospitals, nursing homes, etc.). For more details, refer to 24 CFR Part 55; or
- The project proposes construction in a wetland.
There are two decision‐making processes identified in Part 55 concerning floodplains. They are the 8‐step process (Sec. 55.20) and the 5‐step process (Sec. 55.12(a)(3)). The 8‐step process will apply unless a project falls under the allowed criteria for using the simplified 5‐step decision making process, which are the following:
- Disposition of multifamily and single family (1‐4 unit) properties (Sec. 55.12(a)(1)).
- Repair, rehabilitation, modernization, weatherization, or improvement of existing residential properties (multifamily, single family, assisted living, etc.) (Sec. 55.12.(a)(3))
- Number of units is not increased more than 20%;
- Does not involve conversion from non‐residential to residential; and
- Does not meet definition of “substantial improvement” (Sec. 55.2(b)(10)(i)(A)(2)).
- Repair, rehabilitation, modernization, weatherization, or improvement of nonresidential properties (i.e., public facilities, commercial/retail, and industrial) (Sec. 55.12(a)(4))
- Does not meet the threshold of “substantial improvement” (i.e., the cost equals or exceeds 50% of the market value before damage occurred); and
- The structure footprint and paved area is not increased more than 10%.
- Repair, rehabilitation, modernization, weatherization, or improvement of a structure listed on the National Register of Historic Places or on a State Inventory of Historic Places. (“Substantial improvement” does not apply to historic properties, Sec. 55.2(b)(10)(ii)(B)).
The grantee must document in writing which process is applicable and each step of the applicable process.
Attachment 5-8, Procedures for Making Determinations on Floodplain and Wetland Management, contains an explanation of the 8‐Step decision process. When the 5‐Step decision process is permissible for floodplains, only Steps 1, 4 through 6, and 8 are applicable. Attachment 5-8 Procedures for Making Determinations on Floodplain and Wetland Mgmt ; Attachment 5-9: Flowchart of 8-Step Decision-Floodplain Process ; Attachment 5-10: Flowchart of 5-Step Floodplain Process
5.3.5. Activities Requiring an Environmental Assessment (EA)
Activities which are neither Exempt, CENST, nor CEST will require an Environmental Assessment (EA) documenting compliance with NEPA and with the environmental requirements of other federal laws. These activities generally include major rehabilitation, most new construction, reconstruction, or demolition, any change in land use, or whenever no exemption or exclusion applies. There is no specific regulatory listing of activities that require an EA but if no categorical exclusion applies, an EA is required by default. Generally, new construction, reconstruction, demolition, major rehab, or anything involving a change in land use will require an EA. 24 CFR §58.40 – §58.45
The RE must be aware that if a project consists of several activities that by themselves would fall under various levels as outlined above, the responsible entity must aggregate the review and conduct an environmental assessment on the entire project if one of the activities triggers an EA.
The RE must take the following steps to complete environmental requirements for projects requiring an environmental assessment:
1. Complete the Determination of Environmental Assessment form. The responsible entity must ensure that reliable documentation sources are cited for every item on this assessment checklist (Attachment 5-11). Attachment 5-11: Determination of Environmental Assessment
2. Like CEST, complete the statutory checklist, including historic preservation and floodplain/wetlands requirements within the form.
3. Like CEST activities, seek a concurrence letter from the New Hampshire Division of Historic Resources, which serves as the State Historic Preservation Office (SHPO), Grantees should submit a Request for Project Review (RPR) Form to describe whether the activity (or activities) have an effect on historic preservation or not. Request for Project Review Form (SHPO)
4. The final step in the process involves making a determination as to whether the project will or will not have a significant impact on the environment. This can be done once the review has been completed and all comments have been addressed appropriately. The Responsible Entity must select one of the following two findings/determinations:
- The project is not an action that significantly affects the quality of the human environment and, therefore, does not require the preparation of an environmental impact statement; or
- The project is an action that significantly affects the quality of the human environment and, therefore, requires the preparation of an Environmental Impact Statement (EIS). Both the finding and the EA must be signed by your ECO and included in the ERR. See section below on EA Result: Finding Significant Impact & EIS.
EA Result: Finding of No Significant Impact (FONSI)
In most instances, the environmental assessment will result in a finding that the project is not an action that significantly affects the quality of the human environment and, therefore, does not require an environmental impact statement. If this is the case, the responsible entity must complete the following:
1. Provide public notice called the Combined Notice of Finding of No Significant Impact (FONSI) and Notice of Intent to Request Release of Funds (NOI/RROF) from the CDFA. A sample notice that also includes the notice for Explanation of a Proposed Activity in the Floodway is provided as Attachment 5-12. (If the activities do not involve a floodplain/wetlands, that portion of the notice can be dropped.) Attachment 5-12: Combined FONSI, NOI/RROF, & Explanation of Activity in Floodway
- The FONSI and NOI/RROF must be published in a newspaper of daily general circulation that covers the project service area. For example, the Union Leader is such a daily newspaper serving many communities beyond Manchester.
- The notice must also be distributed to interested parties (i.e., persons and entities that have commented on the environmental process or that have requested to be notified of environmental activities) and appropriate local/state/federal agencies. See Attachment 5-5 for the list of Environmental Contacts. Attachment 5-5: Environmental Contacts
- Provide a 15-day period for comments on the Combined Notice.
2. After the 15‐day comment period has elapsed and the RE has addressed any comments received, the ECO must submit the following to CDFA:
- Signed Determination of Environmental Assessment form (Attachment 5-11) including all attachments;
- Publishers Affidavit of the Combined Notice or “tear sheet” (which can be digital), and
- Request for Release of Funds and Certification – HUD Form 7015.15 (see Attachment 5-6). Attachment 5-6: Request for Release of Funds HUD Form 7015.15
3. The EA review process is complete. However, activities cannot be undertaken until CDFA issues an authorization of approval. CDFA must allow an additional 15-day comment period. If no comments are received, CDFA will issue an Authority to Use Grant Funds – HUD Form 7015.16 (see Attachment 5-7). Attachment 5-7: Authority to Use Grant Funds HUD Form 7015.16
NOTE: It is very important to remember the EA process requires two separate 15‐day review periods. A 15‐day period for comment to the RE and, after CDFA has received the RROF, an additional 15‐day period for comment to CDFA. The CDFA 15‐day comment period does not commence until the date CDFA receives the notice, or the date specified in the published notice, whichever is later. Call or email CDFA to verify dates on the combined notice before publishing.
EA Result: Finding Significant Impact & Environmental Impact Statement (EIS)
An Environmental Impact Statement (EIS) is required when a project is determined to have a potentially significant impact on the environment. Consult with CDFA if an EIS is anticipated or results from an EA. Some examples of projects that require an EIS are as follows: 24 CFR §58.37
- Construction of new limited access highway.
- Construction or installation or demolition/removal or substantial rehabilitation of 2,500 or more housing units.
- Construction of, hospitals or facilities containing a total of 2,500 or more beds.
- Water or sewer project providing capacity to support 2,500 or more additional housing units.
- Project results in unacceptable noise levels (65 or 75 decibels, depending on site use).