This guidance was superseded in September 2013. For current guidance, see www.fhwa.dot.gov/hep/map-21_research/resources/categorical_exclusions/.
The goal of this guidance document is to explain individual stipulations of the template Memorandum of Understanding (MOU) for the assignment of Federal Highway Administration (FHWA) responsibilities for categorical exclusions (CEs) to a State. This guidance is intended to assist FHWA Division Offices/States in drafting a MOU based on the template. The guidance discusses how to draw up particular provisions and tailor them to the State, so that the responsibilities and obligations of the FHWA Division Office and the State Department of Transportation (SDOT) are clear. Once a draft MOU has been developed and executed, this guidance will continue to be useful to individuals charged with implementing provisions of the MOU. Division Offices should recommend to their SDOT partners that, once the MOU is executed, they attach to this document, explanations for the inserted details or changes to the template MOU.
It is important to note that Section 6004 of SAFETEA-LU, codified as 23 USC §326, does not require that States assume these responsibilities. If a SDOT does not choose to enter into a MOU in order to assume responsibilities, the SDOT may continue any current arrangements with the FHWA under which the State administratively completes the tasks of CEs. Those activities are subject to FHWA approval and the legal responsibility for the approval or decision remains with FHWA. Finally, the Division Office should recognize that the SDOT may choose to assume all or part of the responsibilities that may be assigned according to the provisions of §326. The Division Office and the SDOT must jointly agree upon the specific range of responsibilities that may be assigned. But the goal should be to eventually assign all the environmental responsibilities to the State.
The template MOU has 12 sections, designated as Stipulations. The major topics addressed by the stipulations are:
Because of the necessity to accommodate varying scopes of assigned responsibilities among Division Offices, the template MOU contains latitude and flexibility in the scope of delegated responsibilities. The Division Office also will need to complete the blank parts in the preamble, stipulations I(B)(3) [develop the list of activities for the appendix, if added], II(A), II(B)(2), III(D), IV(B)(6)[MOU date], IV(E)(4), IV(F)(2 & 3), V(E & F), and XII. This guidance document points out where flexibility is possible and provides examples of approaches and sample language to include in the MOU. Some latitude is allowed to modify language in Stipulation IV(B),(C),(D), and (E) as long as the revised language is consistent with §326 and achieves the same or better results as the template provision. Any changes to language in other sections of the template MOU is not recommended, and must be coordinated with FHWA headquarters and the Office of Chief Counsel, because of the need to observe requirements specified in the §326 language.
The structure of the template MOU is formal and is designed to unequivocally identify the scope of responsibilities assigned and the actions to be carried out by specific parties. The responsibilities assigned and actions required of the party assuming the responsibilities are legally binding with the execution of this document. Note that recitations presented in the preamble's "Whereas" statements are not legally binding and serve to provide background information or context for this agreement. Information presented after the "now therefore" preamble section of the MOU (in the form of stipulations) is legally binding on the parties who sign this agreement.
It is critical that the Division Offices work with the States to ensure that they understand that this MOU assigns both the responsibilities and the liabilities for decisions and approvals. It differs from "administrative" programmatic agreements (PAs) where tasks, decisions, and possibly approvals are delegated but the responsibilities and liabilities remain with FHWA. Administrative delegations often have the SDOT "acting on behalf of" FHWA to process CEs, comply with Section 106 of the National Historic Preservation Act, or to comply with some other National Environmental Policy Act (NEPA) responsibility. In addition, the Division Office needs to consider whether the State has the resources and procedures in place to permit the SDOT to successfully perform assigned responsibilities.
The MOU will be the primary method to address who (FHWA or SDOT) is responsible for CE determinations. This means that when a SDOT is processing proposed projects that are designated activities identified in the MOU, the projects will be processed in accordance with the MOU. FHWA would not expect a SDOT to ask that the FHWA retain responsibilities for a CE that would normally have responsibilities assigned to the SDOT under the MOU.
Division Offices may be asked by the SDOT whether existing "administrative agreements" for the processing of CEs can remain in force. These agreements are between FHWA and the SDOT. The answer is yes, such agreements can continue, primarily because they will be useful to address projects either not assigned or excluded from this MOU [see Stipulation I(C)]. SDOT's also have executed agreements to address environmental compliance for other Federal laws, for CEs and other classes of action. These other agreements specify the procedures and roles of the parties in these agreements and include other Federal and State agencies as signatories. Whether or not the procedures in these prior agreements may continue when the SDOT assumes responsibilities in this MOU is a matter of negotiation with the parties to these agreements [see discussion in Stipulation II(E)].
The discussion below focuses on key provisions that require special attention when negotiating and drafting a MOU. Division Offices are encouraged to contact FHWA headquarters or the Office of Chief Counsel for assistance on any matters not covered by this guidance.
FHWA may assign responsibility for CE determinations for only the activities that are specifically designated by the Secretary as CEs. The FHWA regulations designate specific activities in 23 CFR 771.117(c) and example activities in 771.117(d). The template provides for assignment of those categories in Stipulation I(B)(1 & 2). The MOU may also include a list of other actions that FHWA has determined to be categorically exempt from the requirement to prepare an environmental assessment or environmental impact statement. The determination is made by the FHWA under 23 CFR 771.117(d), and in accordance with the criteria specified in 23 CFR 771.117(a). The requirements for including a type of project in this list include consideration of data (environmental documentation from past projects) that shows that the particular type of project does not individually or cumulatively result in a significant impact on the environment.
An appropriate source for activities to consider designating as CEs under 771.117(d) would be the lists of activities identified in CE PAs that already "administratively" delegate CE responsibilities to the State. Such lists must unambiguously identify activities that may be designated as CEs in accordance with 23 CFR 771.117(a). In order to include activities in the MOU appendix as part of Stipulation I(B)(3) there must be a basis in data from past project documentation. Such documentation includes the CE PA itself and records or discussions of its monitoring or oversight. The FHWA HQ and the Council on Environmental Quality will consult on the proposed designations in the draft MOU and the documentation in support of activities of Stipulation I(B)3 (see Preparation and Execution of MOU discussion below).
For States that do not have CE PAs, the SDOT and Division Office may either choose to limit the assignment to just activities specifically described in 23 CFR 771.117(c) and (d), or to also include other qualifying activities by mutual agreement. States with CE PAs that can identify other activities not already listed in their PAs that may be designated as CEs, may request that the MOU include designation of those additional activities as CEs. Documentation in support of these added activities should include the rationale for inclusion as a CE and a discussion of the history and experience with regard to individual or cumulative impacts to the environment from such projects.
In the end, the Division Office must agree with the SDOT that activities the SDOT proposes for inclusion on the CE list in Stipulation I(B)(3) are activities that may be designated as CEs. The descriptions of the activities in the MOU must be specific. That is, the designated activity may not be open-ended by being activity-nonspecific or criteria-based.
In some cases, the State and the Division may agree that the State should receive assignment of certain CE activities subject to certain conditions. For example, if the assignment of CE responsibilities applies only if certain thresholds of possible impacts are not exceeded, then those thresholds need to be specified in Stipulation III(D). By describing such limiting conditions, the MOU will exclude any project that does not meet the condition or exceeds the thresholds from assignment under the MOU, even if the project may otherwise qualify as a designated activity.
As discussed in the template overview, many Division Offices have executed PAs with FHWA that focus on the determination, processing, and approval of CEs. Where the same activities and responsibilities have been previously assigned to the SDOT under PAs, the MOU supercedes the previous assignment of responsibility for CEs. In practice, the manner in which a SDOT handles the environmental review for projects designated as CEs should not change because of the execution of this MOU. This MOU defines where the responsibilities and liabilities lie.
Once the MOU has been executed it is the primary means to identify whether the SDOT or the Division Office has responsibilities [see Stipulation I(C)] for specific CE projects. The intent of this MOU is that if a project is one where the MOU provides that responsibilities are assumed by the SDOT, then the SDOT would normally process that activity. Rarely would a project normally assignable to the SDOT not be assigned to the SDOT (see discussion on Stipulation IV(C) below). Finally, the assignment of responsibilities for CEs includes any required reevaluations of CEs that must occur prior to any major approvals or grants, to establish whether or not the CE designation remains valid.
Section 326(b)(1) permits the FHWA to assign to a State other FHWA environmental responsibilities under Federal law. Assignment of all environmental responsibilities would result in the best streamline because the State would be responsible for all actions related to CEs. If that is not possible or practical, the ultimate goal should be to eventually assign all responsibilities. Any environmental responsibilities retained by FHWA would need to be addressed while satisfying the requirement to remain uninvolved in the State's execution of assigned responsibilities.
Several factors should bear on the decision by the Division Office whether or not to assign all or part of the other FHWA responsibilities for environmental review, consultation, or other related actions required under Federal laws applicable to CE projects to the SDOT. First, does the State desire to assume all or part of these responsibilities (and liabilities)? Second, does the Division Office consider the SDOT to have adequate experience and familiarity with the specific responsibilities to be assigned? Thirdly, does the State have the resources to meet newly assigned responsibilities? Both the Division Office and the SDOT must agree on the scope of the other environmental responsibilities assigned to the State for CE projects.
The drafting of this stipulation must clearly identify in Stipulation II (A) from the list below the responsibilities assigned by the FHWA and assumed by the State. The following are FHWA environmental responsibilities that may be assigned under §326(b)(1):
Historic and Cultural Resources
Social and Economic Impacts
Water Resources and Wetlands
Executive Orders relating to Highway Projects
The following is a list of Executive Orders that apply to highway projects. SDOTs assuming FHWA's responsibilities will be required to comply with these Executive Orders as a condition of MOU approval.
E.O. 11990 Protection of Wetlands
E.O. 11988 Floodplain Management
E.O. 12898 Federal Actions to Address Environmental Justice in Minority Populations and Low Income Populations
*E.O. 11593 Protection and Enhancement of Cultural Resources
*E.O. 13007 Indian Sacred Sites
E.O. 13287 Preserve America
*E.O. 13175 Consultation and Coordination with Indian Tribal Governments
E.O. 11514 Protection and Enhancement of Environmental Quality
E.O. 13112 Invasive Species
E.O. 13392 Improving Agency Disclosure of Information
* These laws and Executive Orders require that FHWA conduct government-to-government consultation with Federally recognized Indian tribes. SDOTs may assist FHWA, with the consent of the Tribe, but FHWA remains responsible that this consultation occurs.
The MOU needs to list the environmental review or related responsibilities retained by FHWA in Stipulation II (B)(2). Government-to-government consultation always must be retained and is listed in Stipulation II(B)(1).
When the MOU provides that a State assumes FHWA's responsibilities under a Federal law, the State is deemed to be a Federal agency [23 USC 326(e)]. This status permits the States to perform consultation activities normally reserved to Federal agencies by law.
FHWA responsibilities that are not inherently environmental ones, such as approval of new or revised Interstate access points, authority to undertake final design, or authority to acquire right-of-way, shall not be assigned under the MOU.
The one responsibility that Congress specifically reserved to FHWA is government-to-government consultation. This stipulation does not change the government-to-government responsibility beyond what is required under Federal law and treaties. The MOU and §326(b)(1) utilizes the term "Indian tribes" with government-to-government consultation. Indian tribe is defined in 36 CFR 800.16(m) as an Indian tribe, band, nation, or other organized group or community, including a native village, regional corporation or village corporation, as those terms are defined in section 3 of the Alaska Native Claims Settlement Act (43 U.S.C. 1602), which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. Indian tribe does not include non-Federally recognized groups.
FHWA remains responsible to consider whether or not it is necessary to conduct government-to-government consultation for individual CE activities. The decisions whether or not to conduct government-to-government consultation should be based on the magnitude and nature of the project, the nature and extent of potential effects on historic properties within the area of potential effects, the likely nature and location of historic properties within the area of potential effects, and any general requests or concerns expressed by Indian tribes. The SDOT may initially provide notice of proposed activities, and with the agreement of Tribes, assist FHWA in government-to-government consultation.
Pursuant to FHWA's government-to-government consultation responsibility, when a Federally recognized Indian tribe identifies an issue or concern that is not resolved by the State such that additional government-to-government consultation is required, FHWA should determine that project is excluded from assignment by the MOU (see discussion under Stipulation III(C) below).
Division Offices should provide notice to the Indian tribes with which it conducts government-to-government consultation of the provisions of the MOU, especially if the responsibility for compliance with Section 106 of the National Historic Preservation Act is assigned to the SDOT. The notice should explain that the Division Office is still responsible for government-to-government consultation but should also explain the new responsibility of the SDOT. Follow up telephone contacts or meetings (if appropriate) with Indian Tribes to explain how this MOU would work is strongly recommended.
For purposes of clarity and full disclosure, any responsibilities not assigned to the State in Stipulation II(B)(1) need to be listed in Stipulation II(B)(2). This list should contain the items from pages 6 and 7 of this guidance not assigned to the State. This specific disclosure of retained responsibilities is preferable to stating any responsibilities not identified in Stipulation II (B)(1) are reserved to FHWA and not assigned to the State.
This stipulation follows two paragraphs that describe instances where FHWA retains responsibilities for projects assigned to the State under the MOU. The first instance is the responsibility for government-to-government consultation and the second instance is for any other responsibility not assigned in Stipulation II(A) [e.g., compliance with Section 106 or Section 4(f)].
The intent of this paragraph is to emphasize that for projects where the State is making the CE determination and FHWA has responsibilities for environmental consultation and compliance, both the State and FHWA will need to develop written procedures such that there is no entanglement of the State's decision in the CE determination with a FHWA decision. Those procedures will identify the means for exchanging project related information and the results of FHWA's consultation and compliance actions. For example, if Section 106 was not assigned to the State, FHWA would need to communicate its outcome to the State. In practice, it is likely that the State is already involved in assisting FHWA in complying with Section 106 responsibilities and no formal change in administrative Section106 procedures is likely to be needed. But the procedures for the State's determination of CE must be developed that emphasize that the State must consider the information provided by FHWA about compliance with responsibilities not assigned to the State in considering its CE determination. The procedures need to emphasize that the responsibilities assumed by the State result in decisions that are made by the State rather than FHWA.
The SDOT and Division Office also may have entered into agreements with third parties (other State and Federal agencies) that define procedures, establish time frames, and allow for SDOT decision-making that streamline the process of environmental review, consultation, and compliance. These agreements involve other agencies (i.e., State Historic Preservation Officer, Advisory Council on Historic Preservation, US Army Corps of Engineers) who are not signatories to the MOU and identify responsibilities for projects that are designated as CEs, as well as Environmental Assessments or Environmental Impact Statements. These agreements also are primarily procedural but they identify FHWA as the responsible agency.
While §326 obligates other agencies to recognize the SDOT as a Federal agency when it has assumed responsibilities pursuant to this MOU, those agencies may continue to operate under existing agreements, request that the agreements be amended, or request that the SDOT follow standard procedures when the SDOT is substituted for FHWA. It is in the best interest of both the Division Office and the SDOT to meet with the agencies with which they have agreements before finalizing a draft MOU. The goal of the meeting is to brief the agencies and discuss how procedures might be affected by the MOU's implementation.
The Division Office and SDOT are strongly encouraged to resolve the standing of their agreements with their third party partners, in writing, prior to the MOU execution. If those agencies feel that the FHWA involvement or responsibility was an important consideration in entering into the PA, they may request amendments to the PA or use standard procedures rather than those specified in the PA. While the FHWA does not believe that all existing PAs necessarily will require amendment to continue to operate, discussions with such third parties must occur to clarify a need to revise those agreements or procedures to address projects processed under the §326 MOU. If the briefings occur after the preparation of the MOU they should be completed within six months of its execution.
After the MOU is executed, the SDOT will review its proposed projects and decide which ones are CEs that are included in this MOU and which are not. This process includes ongoing consideration whether the project is excluded from processing under the MOU because it falls under one or more of the exclusion conditions in Stipulation III. The decision that a project does not fall within the MOU could come at any point during the environmental process.
For example, Stipulation III(A) states that even though a project may appear on the list in Stipulation I(B), conditions associated with a particular project may exclude the project from processing under the MOU because it does not meet the CE criteria in 23 CFR 771.117(a) or (b). These include projects that will cause impacts to planned growth or land use for an area; require the relocation of significant numbers of people; have a significant impact on a natural, cultural, recreational, historic, or other resource; have significant air, noise, or water quality impacts; have significant impacts on travel patterns; or result in substantial controversy on environmental grounds; have a significant impact on a property protected by Section 4(f) of the DOT act or Section 106 of the National Historic Preservation Act; or lead to inconsistencies with any Federal, State, or local law, requirement, or administrative determination relating to the environmental aspects of the action.
A second way a project listed in Stipulation I(B) is excluded from assignment under this MOU is that the project exceeds the limiting conditions or impacts specified in Stipulation III(D). Whether or not the Division Office includes any project conditions or impacts in III(D) that would exclude a project from assignment is at the discretion of the Division Office, taking into consideration the recognized competency of the SDOT and importance of the resources to which thresholds or conditions will apply.
FHWA Headquarters recognizes that a great deal of variability already exists nationwide within current PAs that administratively delegate CE tasks and decisions to the States. Many Division Offices withhold "blanket" approval for certain activities and require the SDOT to obtain project-specific FHWA approval for certain activities classified as CEs. In order for the template MOU to have the greatest amount of flexibility, the Division Offices can use Stipulation III (D) to specify the factors in the MOU that have been established previously in PAs or through other procedures to identify the projects that require FHWA approval.
PAs express these factors as thresholds that, if exceeded require project-specific approval by the Division Office. Although there is no requirement to include them in the MOU, thresholds from PAs are recommended for inclusion in the MOU to define the limits of responsibilities based on the competency of the SDOT to satisfy other NEPA-related environmental responsibilities, as assigned. The Division Office at a minimum should consider all the environmental factors listed below in deciding whether or not the MOU should contain exclusions in the assignment of responsibilities based on the category of project or environmental competency. Thus, any project that has one or more of the following conditions listed below could be excluded from this MOU:
The requirement of a public hearing or an opportunity for a public hearing may be a measure of the potential for public controversy for a project. Public controversy is the issue for considering a threshold rather than whether or not public involvement occurs at a certain level. Alternatively, State law may require public hearings for certain projects that otherwise are not required to have public hearings under Federal law. The Division Office may elect not to use the procedural requirement to hold a routine public hearing as a threshold if the project is otherwise not controversial.
Stipulation III(D) may describe a specific threshold for an individual environmental factor in specific or general terms. An example of a specific threshold might be "the displacement of two or more residences or businesses would exclude a project from delegation." A general threshold might be "a project is excluded from delegation if a long term effect to local traffic pattern results." When a threshold is left generally defined in the MOU, the Division Office tacitly agrees that the State is free to interpret when the limiting threshold is crossed. Through monitoring experience under the MOU, the Division Office and the State should look for opportunities to convert general thresholds to specific thresholds. Such changes should be included in an amended or renewed MOU.
While the routine decision whether to exclude a project from assignment of responsibilities in the MOU will normally be made by the SDOT, there are two ways the Division Office may make a determination that a project may need to be excluded from the MOU. One of the ways this process may be initiated is when the Division Office receives information that raises concerns about the State's performance on an ongoing project. If the Division Office becomes aware or has reason to believe that the SDOT's performance with respect to the project does not satisfy the conditions of the MOU, it may intervene, pursuant to Stipulation III(B). The decision to intervene should be based on the nature and scope of the problem. Once it has intervened, the Division Office may facilitate the State's compliance with the MOU or may decide to exclude the project from assignment under this MOU. If the MOU is appropriately tailored to the State's capacities, such intervention should be very rare. Division Offices also should consider whether a particular SDOT performance issue is better addressed in a program review.
The second way the Division Office may exclude a project from assignment is as a result of a concern raised in government-to-government consultation. The intent of Congress in excluding assignment of government-to-government consultation to States was to respect the unique relationship Federal agencies have with Federally recognized Indian tribes and to respect their sovereignty. It is important to note that respecting sovereignty and assigning responsibilities under a §326 MOU are not inconsistent. To both preserve Congressional intent and maintain the efficient and effective assignment of other responsibilities to States, the exclusion of a project as a result of government-to-government consultation should only occur in certain instances. Stipulation III(C) indicates that an instance is when an Indian tribe identifies a concern and the Tribe or the Division Office determines the concern will not be satisfactorily resolved by the State. The question for the Division Office to consider in their determination is: How has the concern been handled?
It is expected that, for most projects, a SDOT will be able to satisfy all of the responsibilities it has assumed while FHWA honors its obligation to conduct government-to-government consultation. This means that FHWA may be involved in the CE project to the extent that tribal consultation is needed, but FHWA will not automatically assume complete responsibility for processing the project as a CE. Such consultation by FHWA is normally conducted as part of Section 106 compliance (but could occur as a result of other environmental issues such as treaty rights). FHWA must consider the need for government-to-government consultation for all projects that are CEs. Some SDOTs have administrative agreements or procedures where Indian tribes have agreed that the State may conduct consultations on behalf of FHWA. There is no reason why these agreements should end.
CE projects may result in no impacts to resources of concern to Indian tribes even when historic properties are present. If there are no tribal concerns, or if all tribal concerns have been addressed to the tribe's satisfaction, government-to-government consultation would not automatically lead the Division Office to exclude a project from assignment. However, FHWA may decide it must exclude a project from assignment in order to respect tribal sovereignty where issues of concern are not adequately addressed by the SDOT.
The identification of a project-specific concern by an Indian tribe to FHWA is a prerequisite for any consideration of whether a project would be excluded from assignment. For example, one outcome of government-to-government consultation might be the identification of a property of traditional importance to the tribe, but the SDOT disagrees the property is National Register-eligible. The tribe might then ask FHWA to intervene because of possible impacts to the property. Whether or not FHWA agrees or disagrees with the tribe on the matter of eligibility, the Division Office should exclude this project from assignment under §326. This exclusion is justified because the SDOT was unable to resolve the concern to the satisfaction of the tribe or FHWA. By excluding the project from the MOU, FHWA retains the ultimate responsibility to approve the project while appropriately considering the concerns or issues raised by an Indian tribe.
A FHWA-initiated exclusion triggers a process of notification, consultation and possible resolution of issues or concerns with the State, described in Stipulation X. This process allows for any tribal issues or concerns to be identified, considered, and appropriately resolved by the SDOT in order to preclude a determination by the Division Office that a project should be excluded. Thus the provisions in Stipulation III(C) and X encourage SDOTs to seriously consider issues or concerns raised by Indian tribes through government-to-government consultation and to adequately resolve such concerns in order to retain the project under the MOU.
The SDOT will need to develop procedures and files/records for projects where responsibilities have been assigned (if procedures and databases do not already exist). SDOT procedures for project review and consideration of environmental effects will need to be in place with the execution of this MOU. The Division may wish to include in the MOU some more detailed language describing how the SDOT will handle CE reviews and how the State will meet documentation and recordkeeping requirements. The SDOT is obligated by this stipulation to document the decision that a project is a designated activity included in the MOU, its project review, and approval (by whom and when). Such records must include documentation that shows the SDOT has carried out all other applicable FHWA responsibilities assigned in Stipulation II of the MOU.
Documentation may be electronic or on paper as long as it is retrievable and can be made available for FHWA and public review. The documentation should indicate that the SDOT has made a determination that a project is a CE pursuant to this MOU. That determination should include approval documentation that indicates the name and title of the State official that made the approval and the date of the approval. Division Offices should encourage the SDOT to develop computer files for ease of access, ease of reporting, and ability to implement electronic quality controls.
CEs other than those designated in 23 CFR 771.117(c) may have the potential to cause more substantial environmental effects. As a result, documentation must be prepared that summarizes the results of the necessary environmental studies and investigations of those potential effects. Due to the potential for more substantial effects and to promote independent and unbiased decision-making, FHWA will require that the documentation for CEs designated in Stipulation I(B)(2) and (3) be reviewed by a competent reviewer who is not the preparer of the documentation.
Record keeping should clearly show what responsibilities were carried out by the SDOT and what were carried out by FHWA. This clear documentation will be important because of the possibility a CE may be excluded from the MOU, and because some Division Offices may choose to assign only some responsibilities to SDOTs.
The SDOT will normally make the decision whether or not a project is a CE that is assigned under the MOU. The expectations is that few CE projects would be processed outside the MOU. Stipulation IV(C) requires specific documentation when the SDOT decides to exclude a CE project from the MOU. CE projects that the SDOT decides to exclude from the MOU would be processed according to the procedures in place prior to the development of the MOU. The SDOT could decide to exclude a project from the MOU at any point during the project development process prior to its approval of the CE. This could occur because the State determines the project doesn't meet assigned CE criteria or because the project should be processed as a EA or EIS. Because the Division Office may not have been involved in early project decision-making, they need to take special care when assuming responsibility for a project transferred after the environmental review process has started. The Division Office should review the procedures used and any studies related to a project. The Division Office may direct the SDOT to conduct additional studies for projects excluded from the MOU.
This stipulation both sets the context in which the delegation of FHWA's NEPA and other environmental responsibilities would occur and clarifies the resources, qualifications, standards, and expertise expected of the SDOT. The 2002 AASHTO study of delegation indicated that the delegation of environmental decisions works best at SDOTs where there is an appropriate level of environmental sensitivity and commitment by SDOT staff. Provisions in 23 USC §326 require that the State possess the financial resources to carry out the provisions in the MOU. Accordingly, the MOU includes a requirement that the SDOT must maintain organizational and staff capabilities to carry out the responsibilities assigned in the MOU. The Division Office, working with the SDOT, must determine that the SDOT meets this requirement.
The general expectation is that the SDOT will utilize qualified personnel to address specific responsibilities for environmental consultation and compliance. If Section 106 compliance is a responsibility assigned to the State, the National Historic Preservation Act identifies a professional qualifications standard. The State must have staff and/or consultants who meet the Secretary of the Interior qualifications standards for individuals that document historic properties. All documentation must be prepared or reviewed by qualified individuals. Past experience gained by Division Offices from Section 106 programmatic agreements indicates that when Section 106 qualified individuals are SDOT staff they do a better job protecting the interests of the SDOT. Also, if the SDOT has staff that meets the professional qualifications they would have an important role in the event Section 106 consultation were terminated or if the Advisory Council were to comment on a project.
Both the State and the FHWA have an interest in ensuring that quality performance is achieved and maintained in the SDOT's execution of MOU responsibilities. The MOU template addresses this factor through the quality control requirements for the SDOT and the broader quality assurance measures that apply to both FHWA and the SDOT under Stipulation IV(F).
The SDOT's quality control responsibilities begin with the State conducting quality control activities under Stipulation IV(E). This part of the MOU requires the SDOT to monitor its performance at the project level and make improvements as needed. Quality control is an assessment of each decision or action rather than a review of a subset or sample of the decisions or actions taken. The intent of this provision is for the State to check for errors or omissions [for instance, regarding the documentation requirements in Stipulation IV(B)] and for the State to take corrective action without the intervention of the Division Office. The Division Office may add additional or more detailed quality control procedures to this section. Such measures already may have been identified in programmatic agreements and the Division Office may want to include those, under item IV(E)(4).
This is another provision for monitoring, but at a broader program scale. Stipulation IV(F) requires the Division Office to conduct quality assurance activities. Quality assurance entails an assessment of a subset or a sample of decisions or actions taken although the responsibility for monitoring satisfactory compliance with the provisions of the MOU extends to all actions taken. This responsibility is addressed in several ways in this subsection, including periodic reporting and process review sessions.
Each quarter (January-March, April-June, July-September, October-December), the SDOT will submit a list of the projects that it has determined to be CEs. This list will, at a minimum, contain the type of project, location, and cost. It is recommended that the Division Office at least briefly review the list to assess whether the SDOT's CE determinations comport with the provisions of the MOU. The Division shall have access to project information as needed for this review.
The Division Office also should review the lists in its evaluation of the SDOT's performance of the provisions of the MOU. The Divisions should consider both how well the State handles processing of projects determined to be within the MOU, and how appropriately the State exercised its power to exclude projects from the MOU. The latter consideration is useful to ensure that the exclusion provisions are not used as a liability-shifting mechanism.
Discussions between the SDOT and the Division Office regarding the performance under the MOU should occur any time it is considered to be necessary. Performance issues also should be discussed during meetings scheduled to coincide with the State's report of its performance (see below).
Qualitative reviews by the SDOT of its performance is required under Stipulation IV(F)(2). The MOU specifies the report frequency. The State's report on its performance under the MOU is followed by a meeting between the Division Office and the SDOT. It is the responsibility of the Division Office to review the SDOT report, review the State's records, and conduct any other monitoring activities necessary (i.e., conduct project field reviews of a sample of projects, interview State staff). Another monitoring activity, especially in the MOU's first term, might be a review of projects called into question through public or agency complaints, noting the State's response and corrective action. Alternatively, the Division Office could conduct project area visits to ground-truth information related to CE implementation.
The Division Office should document its findings and conclusions regarding the State's performance. The results of these quality assurance activities should be used by the Division Office as a basis for considering amendments to the MOU and deciding whether or not to renew the provisions of the MOU once its initial term has expired. To promote public understanding of this assignment of responsibilities to the State, the SDOT and the Division Office may consider methods to make reports and monitoring information publicly available (i.e., posting on the web).
Since 23 USC §326 provisions for delegating FHWA's environmental responsibilities are new and available to States nationwide, FHWA Headquarters Office is interested in the SDOT's performance. The Division Office should inform FHWA headquarters of the results of the quality assurance reviews. That will assist FHWA Headquarters in its assessment of results under 23 USC §326. FHWA Headquarters is committed to the success of this provision to delegate CE responsibilities, and with its national perspective, is uniquely positioned to help identify and correct issues or problems that arise.
The Federal government has no liability or responsibility for actions or decisions that have been assigned under this MOU to the State. This stipulation discusses procedures and responsibilities in the event of litigation. It also describes the Notice of Final Agency Action for a 180-day statute of limitations for litigation.
Stipulation IV(H) requires the State to notify FHWA of any pre-litigation claims within 7 calendar days of the State's receipt of notice of the claim. If a lawsuit is filed, the State must notify both the FHWA Division Office and U.S. Department of Justice (Assistant Attorney General, Environment and Natural Resources Division in Washington, D.C.) within 7 calendar days of the State's receipt of service of process. Notice to the FHWA and the Department of Justice will include copies of the complaint and related materials. The documents must be transmitted by hand via express mail or delivery service. This requirement is intended to prevent transmittal by regular mail because security screening of regular mail is time-consuming and often severely damages the documents.
The State is responsible for defending any lawsuits. The Federal government may intervene or participate in some other manner. This stipulation requires Federal approval of State settlement of a lawsuit if the FHWA and Department of Justice determine, after reviewing the proposed settlement, that the settlement might affect the interpretation or application of Federal law. The State also needs to obtain FHWA approval of the settlement of any lawsuit or pre-litigation claim if the State wants to preserve the possibility that the expenses of carrying out the settlement may be eligible for Federal-aid. The FHWA approval of a settlement is not an approval of Federal-aid or a guarantee of eligibility, but the lack of settlement approval gives FHWA the right to refuse eligibility even if the expenses meet all other Federal-aid eligibility requirements.
One of the responsibilities that the State may exercise under the MOU is the decision whether to publish a 180-day statute of limitations notice under 23 U.S.C. §139(l). Although likely to be a rare occurrence for CE projects, States may decide to publish a Notice of Final Agency Action in the Federal Register. The State will transmit the draft notice to the FHWA Division Office and FHWA will publish the notice in the Federal Register on behalf of the State. The State will be responsible for the expenses associated with publishing the notice in the Federal Register pursuant to the FHWA guidance issued for 23 U.S.C. §139(l), as provided in Stipulation IV(I).
This stipulation follows from requirements specified in 23 USC §326. Provision ‘B' of this Stipulation requires the SDOT to accept the jurisdiction of the Federal courts for matters arising from this MOU. In order to comply with the Stipulation the State must waive its sovereign immunity under the 11th Amendment to the US Constitution. To do this, the State either already must have or will need to pass legislation that legally allows this waiver. The MOU cannot be executed without evidence of the State's legal authority to waive its 11th Amendment rights. For states that may need to adopt new authorizing legislation, the FHWA Office of Chief Counsel has developed sample language States may consider for this legislation. This sample language is available from FHWA headquarters.
Stipulation V(F) indicates that either the MOU is signed by the State's Attorney General or the State provides an opinion letter addressed to the FHWA Administrator (and attached to the MOU) related to certification of the State's ability to take on MOU responsibilities. It is critical that FHWA assure itself that the State has the legal authority to enter into the commitments contained in the MOU, that the proper party is signing for the State, and that the signatory has the legal authority to waive the State's Eleventh Amendment rights under the U.S. Constitution. The execution of the MOU is different than the typical FHWA-State agreement because of the required Eleventh Amendment waiver, and may not fall within existing State transportation enabling laws. The Attorney General must have authorization to speak for the State, to certify the 11th amendment waiver and other issues. The fact that the legislature may have enacted a special enabling law is only part of what is required. FHWA also needs the legal opinion from the State's Attorney General to verify that the legislation is in effect and creates the necessary powers. If a particular State is represented (according to State law) by an office other than the Attorney General, the MOU can be adjusted on a state-by-state basis to reflect the proper State attorney signatory.
This stipulation is derived from requirements in 23 USC §326 and equally applies to the initial MOU, any amendment to, or renewal of the MOU. This stipulation defines the required public notice actions. The SDOT must publish public notice of the proposed MOU and any amendments or renewals of it in one or more newspapers whose circulation is statewide. The Division Office has the responsibility to publish a similar notice in the Federal Register. The notices should identify the basic authority for the MOU, what the MOU will do, the time and procedure for filing comments, and the FHWA and State contacts. The notice must request comments on activities proposed as CEs to be listed in the MOU that are not specifically described in 23 CFR 771.117(c) or (d). FHWA HQ has prepared a template Federal Register notice, whose information should also appear in the State's notice. The information includes a description of the CEs assigned to the SDOT for processing [i.e., the activity categories listed in Stipulation I(B) and the limiting conditions in III(D)], as well as a reference to the authority for the assignment under 23 USC §326. The notice also indicates where the final MOU may be found after comments are considered. As long as the MOU document itself is readily available upon request, it is not necessary to publish the entire MOU document. A statement of its availability and appropriate contacts for a copy of the document is sufficient. An electronic link to the proposed MOU is very useful, but is not a substitute for public access to a hard copy of the document.
An efficient method to gather comments on the MOU is for the Division Office to open a docket with the DOT's Docket Management System (DMS) (as of the date of this guidance, the FHWA contact for the DMS is Renee Wright at 202.493.0402). Requests for a docket number can be made by telephone or e-mail. The docket category for the MOUs is "non-rulemaking," and the subcategory is "notice." DMS also requires the Divisions to provide the title for the docket (this can come from the title in the notice) and the subject matter. Once the Division receives a docket number, it may file the proposed MOU and any other documents in the docket. Please make certain that all filings and communications contain a reference to the assigned docket number.
Both the FHWA notice and any State-published notices or outreach should provide the docket information and specify that the docket is the place to file comments. That will create a centralized record and avoid confusion about where and how to file comments. The States, in their published notices, may find it helpful to include the publication information for FHWA's Federal Register notice with the description of the MOU, so that people are directed to the FHWA notice in its entirety. Individuals without direct access to the Internet should be referred to their local library for public Internet access.
There shall be a 45-day period for the proposed MOU when public and agency comments would be taken. Both the Division Office and the State DOT must consider all comments prior to executing, amending, or renewing the MOU. There is no requirement for additional public notice and comment based on revisions to the MOU made in response to the public notice. The FHWA should prepare and file in the DOT DMS docket a brief response to the comments, which can be organized by general topic areas in a fashion similar to that used to respond to comments on proposed rules, and a summary of the Division's decision on the MOU. The Division should include the final MOU in the docket. It is recommended that copies of the final MOU be posted on the SDOT and Division Office web sites as well. Copies of the final MOU should be available upon request.
Note that the date of the Federal Register notice and the date and name of the newspapers where notices were published are components of the whereas clauses on the first page of the MOU.
Divisions should consult with FHWA headquarters and the Office of Chief Counsel if there are any questions about preparing and publishing the notices, filing the FHWA responses to the comments, or handling other aspects of the comment process.
This stipulation mainly derives from the wording in 23 USC §326. The term will be three years, starting with the date of the last signatory. The MOU is renewable, also for a period of three years, based on satisfactory performance of the provisions of the MOU by the State. Stipulation VII(B) facilitates amendment and renewal actions through communication to the SDOT of the results of monitoring and by requiring a meeting six months prior to the end of the three-year term. The Division Office should consider any complaints or other issues relating to the SDOT's performance, and any irregularities in the performance of the provisions of this MOU. Specifically, the Division Office will evaluate the effectiveness of the MOU and whether or not it has had an adverse effect on the environmental review process. Consideration especially should be given to whether the SDOT has properly classified projects for which responsibility has been assigned. By the time of the renewal meeting, the Division Office has already documented the results of the monitoring and should use those reports to support making its decisions about of renewal, amendment, or termination of the MOU.
The intent of this stipulation is to allow for amendments when the parties agree. However, it also is the intent to make the amendment process one that is open to public notice and comment. While technical corrections of language in the MOU are allowable without triggering a public review process, and certain specific types of adjustments specifically are exempted from treatment as amendments, such as partial termination by FHWA, any other revision will require notification of a request for amendment and consultation to work out an amended version.
If the parties do not agree to the terms of a draft amended MOU, the existing MOU provisions remain in force. A request to amend the MOU does not terminate or alter its existing provisions.
When the Division Office and the SDOT agree, the MOU may be terminated in its entirety for any reason. The language of 23 USC §326 allows for termination of the assignment/assumption of responsibilities when a FHWA determination is made that the State is not adequately carrying out responsibilities assigned to the State. Stipulation IX(A) therefore allows the MOU to be terminated by FHWA without SDOT agreement if FHWA determines the State has failed in one or more responsibilities assigned under the MOU. The SDOT may terminate the entire MOU unilaterally for any reason.
Stipulation IX(B) allows by mutual agreement, the termination of State responsibilities for particular activities defined in Stipulation I (the CE categories designated and assigned) or the other FHWA environmental responsibilities assigned in Stipulation II. Using these provisions, the Division Office may partially terminate the MOU by taking back certain responsibilities, with or without the agreement of the State, if the FHWA determines that the State has failed to adequately meet the MOU requirements for the specified responsibilities. Except for the specified responsibilities taken back, the MOU remains in force.
This stipulation outlines the procedures for "termination" which means the ending of a responsibility that was assigned in the MOU. The provision also governs how the FHWA may exclude a specific project as not meeting the stipulations of the MOU. These procedures should be followed for actions under Stipulation IX (termination) and for FHWA actions to exclude a project or responsibility from the MOU. Stipulation X(A) describes the procedures that apply to all actions that do not arise from extraordinary conditions. Stipulation X(B) is reserved only for unusual and extraordinary circumstances.
Stipulation X(A) acknowledges that there is the potential for misunderstanding and errors if a Division Office or SDOT simply terminates all or part of the responsibilities assigned in the MOU or excludes a project based on what appears to be inadequate performance by the State. To address possible misunderstandings and errors of information as well as to afford the State the chance to correct its performance, this provision sets up a process of notification and a 30-day period where the parties to the MOU may discuss any issues or concerns in order to resolve them. Because continuing the provisions of the MOU is assumed to be in the best interest of all parties, the 30-day period offers an opportunity to identify problems and develop solutions. If the issues or concerns cannot be resolved or addressed through amending the MOU or other means, then the MOU or any of its responsibilities can be terminated, or specific projects may be excluded from the MOU. In the case where a SDOT unilaterally terminates the entire MOU, the 30-day period (or longer by mutual agreement) should be used to plan for the transition involved with the re-assumption of responsibilities by FHWA.
If the FHWA reassumes responsibility for processing a project, the question arises whether the FHWA should review what the State already has done. Where the FHWA takes over processing a project before the State has made a CE determination, the Division Office should review the State's work and satisfy itself that the work is valid and appropriately supports FHWA decision-making. If the State already made a CE determination, the FHWA ordinarily will not need to evaluate the State's work. An exception would arise if the FHWA has to make a subsequent decision that relies on the underlying work, such as a reevaluation, or if there is some circumstance that suggests an irregularity affecting the validity of the State's determination.
Stipulation X(B) is expected to be very rarely, if ever, invoked. If the SDOT has egregiously failed to abide by the responsibilities it has assumed in the MOU, FHWA may take action immediately, and that action may include terminating the MOU or excluding a project from the MOU without notice or a 30-day consultation period. The presence of this provision is one of the ways to demonstrate to other Federal agencies that FHWA does not take the assignment of its responsibilities lightly. Implementation of this provision should only occur under extraordinary circumstances. If done the Division Office must consult first with FHWA headquarters and the Division Office must document its reasons for the action.
Stipulation X(C) is a survival clause. Under the provision, the SDOT retains liability for any of its acts or omissions while the SDOT is operating under the authority of the MOU and 23 USC §326.
This stipulation is intended to preclude any entanglement of FHWA decision-making with decisions that are the assigned responsibility of the State. The State must be able to say that, with the execution of the MOU, projects for which it has assumed responsibility, project decisions were made by the State and not by FHWA.
Stipulation XI(A) says that the Division Office will not provide assistance to the State for individual projects where the State has assumed responsibilities. "Project-level assistance" is defined as advice, consultation, or review for a project. However, the stipulation does not preclude the Division Office from discussing issues addressed in prior projects or legal interpretations from regulations, policies or guidance. It further clarifies that if "project-level assistance" is needed as a result of government-to-government consultation, the Division Office shall reassume responsibilities for that project.
Stipulation XI(B) says that the Division Office shall not become involved in a project assigned to the State by intervention, acting as a broker, an intermediary, or by being involved in another way with a State or Federal agency or the public regarding responsibilities assigned to the State. The exception regarding intervention is if the Division Office is performing its monitoring and quality assurance obligations under the MOU or general oversight and stewardship obligations under the Federal-aid highway program. Accordingly, the Division Office may elect to join the State in meetings with other agencies. In cases of extraordinary circumstances, the Division Office may submit comments to the State and other agencies regarding the State's performance or to comment on issues with broad or unique policy implications.
FHWA Headquarters recommends that the Division Administrator be involved in preparation of the MOU. The Division Administrator will sign the MOU for FHWA and on behalf of the Secretary of USDOT. Any amendments to the MOU should likewise involve the Division Administrator and be executed by the Division Administrator.
Once the MOU has been fully executed the Division Office should provide FHWA Headquarters and the Office of Chief Counsel with a copy. If the MOU is subsequently amended and anytime it is renewed, the Division Office would provide FHWA headquarters and the Office of Chief Counsel with a copy of the amended or renewed MOU.
Because this MOU transfers legal responsibility and liability from FHWA to the State, each FHWA Division Office will need to submit its draft MOU to the field counsel in the Office of the Chief Counsel for a legal review. Concurrently, the Division Office will also submit the draft MOU to FHWA headquarters for review. FHWA headquarters will provide any comments to the Office of Chief Counsel and the Division Office. States should similarly subject the draft MOU to a state-level legal sufficiency review.
If the draft MOU contains activities included in Stipulation I(B)(3) that are activities listed in a CE PA, the Division Office must also submit documentation to support that those activities are CEs. The documentation includes a copy of the CE PA, any written reports of oversight or monitoring of the PA, or an assessment of the term and outcome of the implementation of the PA. If activities are included in Stipulation I(B)(3) that are not already listed in a CE PA, include documentation that shows the rationale for their inclusion as a CE and a discussion of the history and experience with regard to individual or cumulative impacts to the environment.
In addition to reviewing the draft MOU, FHWA headquarters will submit a copy of the draft MOU and the documentation described above to the Council on Environmental Quality. FHWA headquarters will then inform the Division Office of the outcome of its review and the Council on Environmental Quality consultation.