Compliance with Federal Environmental Review Requirements

Environmental Reviews

Did you know that every Federally-funded project must undergo an environmental review before any funds can be spent, or even committed to a project? This includes projects that do not directly impact the environment. Federal environmental requirements are perhaps some of the most stringent requirements that funding recipients must adhere to. The type of review that must be completed depends on the complexity and type of project to be implemented. However, one key point for all recipients and subrecipients to understand and know is that choice-limiting actions (CLA) taken prior to the environmental review having been completed are prohibited and will jeopardize a project’s Federal funding.

Choice-Limiting Actions

A choice-limiting action is any activity that a grantee undertakes, including committing or expending HUD or non-HUD funds, that reduces or eliminates an opportunity to choose project alternatives that would avoid or minimize environmental impacts or enhance the quality of the human environment. Examples of CLAs include acquisition, leasing, rehabilitation, demolition, new construction and ground disturbance work (e.g., clearing, grading, or grubbing). The “Federal Nexus”, which is the event that triggers the requirements for federal environmental review under a host of laws, regulations, and Executive Orders, determines the date when grantees may no longer perform a CLA prior to the environmental review having been completed.

Levels of Review

HUD-funded CDBG projects generally must comply with the National Environmental Policy Act (NEPA) requirements and regulations at 24 CFR Part 58; however, other Federal laws may apply as well. And because activities like acquisition and permitting that may be ancillary to a project have the potential to substantially delay implementation of a construction project, it is important to begin the environmental review process as soon as possible after conceptualization.

While reviews for exempt or categorically excluded activities, like planning or tenant-based rental assistance that are not subject to requirements at 24 CFR 58.5 can take as few as one to five days to complete, the review for a new construction or major rehabilitation project can take as long as a year (or more) to complete.

For CDBG projects that must undergo a full environmental assessment (EA), a 15-day public comment period must be held before HUD will issue the Authority to Use Grant Funds (form 7015.16)—to provide citizens an opportunity to object to the release of funds to the grantee. HUD’s issuance of the form 7015.16  (for projects that must undergo an EA) essentially completes the environmental review process and allows a project to begin.

Environmental Review Adoption

Some federal grants permit recipients (and subrecipients) to adopt environmental reviews performed by other Federal agencies (e.g., FEMA) when the grantee is providing supplemental assistance to actions performed under the Stafford Act. This process is intended to streamline disaster recovery projects and can substantially shorten the amount of time a grantee must spend on the environmental review for its project.

In order to adopt another Federal agency’s review, the CDBG project must contain the same scope of work as the original project and generally cover all project activities proposed by the CDBG project. A best practice for subrecipients of HUD funds is to coordinate with the pass-through entity prior to adopting another Federal agency’s environmental review for their projects.

How can HORNE assist your organization?

HORNE has a team of environmental subject matter experts who are able to assist your organization in the various aspects of environmental compliance, including providing technical expertise on complex projects, coordinating with regulatory agencies and promoting resiliency—a HUD objective—through use of the Green and Resilient Building Standard on residential construction projects.

For additional ways in which HORNE may assist your organization, please visit the Environmental landing page on the HORNE State and Local Government webpage. And for specific requests or questions related to your organization’s environmental needs, please contact us directly here.



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